U.S. Small Cap Stocks

The volatility of computer-driven, casino-style markets will not only test one's abilities but also their objectivity. When F-TV is repeating "the sky is falling" based on short-term price action, it's hard to remain objective.

Are equities ready to crumble through support? A sustained break below support or above resistance requires energy.

The 5/20 gap could not be cleared because it lacked the necessary energy to clear the zone on the first attempt.

The 5/6 "flash crash" swing low as been tested three times on progressively decreasing volume. This reflects deterioration in downside force. As long as this deterioration continues, it is unlikely that a break will be sustained. A bounce off support on decreasing volume would be another bullish setup and would support a test of the 5/14 gap. Any close below the 5/6 low on heavy volume would support a continuation of the trend.

This deterioration of the downside force is likely no accident as a minor June cycle date approaches. When time is right, the market will seek the opposite direction of the current move.

We're basically watch and wait now.

Russell 2000 ETF (IWM):