It wasn’t a great day for stocks with the S&P 500 drifting lower by 30 basis points, giving back a good portion of yesterday gains. At the end of the day, not much changed from yesterday.
Russell 2000 (IWM)
What did change from yesterday, is the Russell 2000 which tanked by over 1.35%. It managed to finish the day at a pretty significant level around 1,455. I fear that this index is not going to hold support. If you look at the chart, you can see why I am so nervous about the index not holding support. You can see that the outcome could be disastrous, with the potential to fall back to roughly 1350, should support not hold. It is a drop of about 7% from its current level and more than 15% off its July 31 highs.
Is that bearish enough for you? The biggest complaint among readers is how I’m a permabull. Wrong. I call it as I see it. I talked about this in more detail plus gave a lesson on how I use Bollinger Bands into’s video: It Is Time For Stocks To Sink Or Swim
The last time the Russell 2000 was this undervalued to the S&P 500 was in January of 2008.
For the moment, Amazon is holding on to support around $1,750. It too is at a critical level. Should the $1750 level break it could fall to about $1700.
Netflix continues to orderly trade lower and seems to be holding the falling wedge pattern. There is a gap that needs filling around $273.40. At this point, that gap looks like a potential option as well.
Twitter looks as if it may be getting ready for its next higher towards $46.
I’m not a fan of the shape of Micron’s chart. Support at $42 is critical and must hold, or $38.70 is coming.
I have been seeing a bunch of options activity for AT&T in recent days, and the technical chart is starting to look much better. You can read more here. AT&T: The Trend Is Your Friend
That’s going to be it for today