The Russell 2000 and the S&P 400 Midcap index sometimes give indications of where the larger market is preparing to go. If there’s real sentiment behind a developing move in the more well-known indices, then it often is reflected first in the Russell and Midcap. We are seeing that development intraday today, as both of those indices appear fairly bearish.
We are trading based on the assumption that the SPX high was put in last week, and thus the strategy now is to sell from retraces. Thus, for example, we will be watching the 38.2% and 61.8% retracement levels near 1998.70 and 2006.60 respectively. In addition, if price breaks below this morning’s SPX low near […]