Thursday, June 23, 2005

Market Getting Squishy

Today was the first really good day for bears in about a month.

As I mentioned recently, the Russell 2000 - which I've been following closely, pushed above its descending trendline a few sessions ago. I mentioned that if it moved upward and didn't get beneath the trendline again, the nature of the line would clearly have changed from resistance to support, and the bears among us would be in trouble.

What has in fact happened is the indexes all moved down hard today, and as you can see in the chart above, IWM (the ETF for the Russell 2000) is once again beneath the descending trendline. This is bound to be disappointing to the bulls, because after an entire month of "winding up for the pitch", the ball didn't go out of the stadium but simply plunked back down to earth.

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