When I checked the market earlier today it was looking like there was going to be an ugly sell-off but this didn’t materialize. However, there was a bearish evening star in the Dow Jones Industrial Average which may suggest the start of a topping process but while there was some damage to technicals it wasn’t enough to suggest this is the top.
The S&P didn’t match the topping process but while there were losses they weren’t enough to register a (faster) channel breakdown.
The Nasdaq broke channel support but with the afternoon recovery, I wouldn’t fully register it as a breakdown.
The Russell 2000 managed to hold its 50-day MA (again) but this wasn’t looking definitive earlier on. Relative performance suggests there is more downside to come but a price close below 1,700 should be enough to start this.
For tomorrow I’ll be looking for that earlier weakness to reappear. It feels like today was an opportunity for longs to sell out without too much damage but I doubt longs will be willing to defend this for too long – particularly as their positions will be reduced. New buyers will find it hard to get value here.
