I wrote about junk bonds () as our clue as to when the market might stop rallying.HYG gapped lower today breaking beneath its 50-DMA.And worse, also fell right to the January 6-month calendar range low (red horizontal line).
Momentum also fell as per our Real Motion Indicator.For junk bonds and small caps, the next day or two will be very telling on whether this a buyable dip, or the start of a bigger correction.Small caps, or AKA Granddad Russell 2000, also broke the 50-DMA, yet remains well above the January 6-month calendar range low.We will watch for these scenarios before planning our next trades or exit plans on existing ones with good profits.
In the triad of the Family, also note that Granny Retail did better and has to hold 70.00.Transportation, held 266, which is the area it broke out from.Hopefully, watching these four instruments will help determine whether today was an overreaction or a new buy opportunity.
ETF SummaryS&P 500 () 500 now the pivotal point-490 near-term supportRussell 2000 (IWM) 185 the underlying supportDow () 385 now resistanceNasdaq () 430 now resistanceRegional banks () Back to the 45-50 rangeSemiconductors () Support 196Transportation (IYT) 266 supportBiotechnology () 135 pivotalRetail (XRT) The Jan calendar range high at 73 now back to resistance with 70.00 supportMore By This Author:
