Monday, April 1, 2013

Weakness In Small Caps Telling A Story?

ISM came in well below expectations after Chinese PMI was already below forecast. That was half an hour into the session and the reaction was an instant sell off. There was a bit of a bounce in the early afternoon, but in the last hour we revisited the lows (with fresh new lows for tech).

What stood out today, was the weakness in small caps. While big caps barely moved, and the S&P500 and tech pulled back between 0.4 and 0.7%, the Russell2000-index lost almost 1.35%. In the recent past, small caps were often leading the rally, but this might be a signal to where the indices are heading next. So far, no harm done, but when other major indices start breaking their triangles/ranges (see daily charts), trouble is on the way.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Euro, oil, metals
The euro is bouncing a little bit here, actually showing strength while markets are pulling back.

Oil went all over the place. A spike up towards 98 in pre-market was quickly sold and oil bounced on the 96-level to get back up near 97, smack in the middle of today's range.

Gold stood firm while copper and silver lost respectively 0.9% and 1.3%.

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