Correction Done?

This morning the market sold off after Yellen gave her little talk. I’m watching the Russell 2000 ($RUT) to get an indication of market direction and I think that we are done with this correction and are going to take a stab at the highs again. My reason is that we hit some 30 minute demand that lines up right with the 50% retracement of the total move up. It is a logical, clean retracement right at the 1,150 level.

$RUT - 30 Minute - 15 July 2014
$RUT – 30 Minute – 15 July 2014
$RUT - 180 Minute - 15 July 2014
$RUT – 180 Minute – 15 July 2014

If this level does not hold then all bets are off and I’ll be watching the 1,030 level for the next good looking demand.

Indexes Holding Demand – 9 July 2014

So we’ve sold off for two days and I think the selling is done for now. The Russell 2000 ($IWM) is down 3.83% over the two days, which is a fairly large move. All of the indexes hit daily demand yesterday so I took the opportunity to get long in a number of names, namely

  • SSYS
  • LNKD
  • TWTR
  • TSLA
  • IWM
  • BMRN
  • AMZN
  • NTES
  • SPWR
  • TTWO

While we are in an uptrend, I am buying dips and I consider this a dip.

$COMPX - Daily - 9 July 2014
$COMPX – Daily – 9 July 2014
$DJI - Daily - 9 July 2014
$DJI – Daily – 9 July 2014
$INX - Daily - 9 July 2014
$INX – Daily – 9 July 2014
$RUT - Daily - 9 July 2014
$RUT – Daily – 9 July 2014

We have had a big run, so I am a little cautious and keeping a close watch on my positions, but a trend is a trend until the end.

 

IWM – Potential Time Correction

The markets sold off a little today, led by the Russell 2000 ($IWM, $TF_F, $RUT) that took a 1.7% pounding. If you think back to the March through May sell-off it was the Russell that lead then too, so we might be in for a deeper correction. I saw no need to get short today into turnaround Tuesday, but I’ll certainly be keeping a watchful eye on the Russell for a while.

IWM - 180 Minute - 7 July 2014
IWM – 180 Minute – 7 July 2014

A market can correct either by selling off, or by consolidating for a while. We may be seeing the latter, with the Russell potentially trading in a range between $108 and $120. Until we break and hold either side, I’m going to consider this a trading range, or time based correction. Certainly something to keep a watchful eye on, as the Russell seems to be the canary in the coal mine right now.