Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
I wrote last week that eventually this divergence between the small caps and large caps had to close. Either the large caps came down to perform more like the small caps, or vice versa. Today it is the former. Finally with Apple taking a break, the NASDAQ and S&P 500 are underperforming the Russell 2000. We still don’t have a -1% day on the year for the S&P 500 but at this moment the NASDAQ is testing that level. Both have broken the 10 day moving average intraday (which they did about a month ago) but sit above the 20 day.
Again, even the lightest of ‘healthy pullbacks’ – a simple 38.2% Fibonacci retracement of the December thru February move – would mean a breakage of that 20 day moving average…
What is important to note today is the lack of response to ‘good news’.
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