The gap down this morning in U.S. indices probably represents a minor low, and the market should be preparing for an upward retrace that could last a day or longer. In currencies, the Dollar rally is still strong, and the recent correction probably represents part of a small fourth wave that will precede a climb higher into late October or November.
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.