Small-caps could be poised for a deeper pullback in the short-term, as we can see from this chart of the Russell 2000 iShares (IWM). A lot depends on what happens today, so stay tuned.
Here's the scoop: On Friday, the IWM tagged the top of its recent Bollinger Band and pulled back.
On Monday, it gapped lower and tagged the bottom of the Bollinger Band.
So, trading range, right? Except that short-term momentum appears to be weakening. Therefore, it wouldn't surprise me to see 113 or 111 tested. Even 109.60 could be tested within the context of a larger bull move.
For the bigger picture, let's look at a weekly chart of the IWM.
You can see that the IWM has been rangebound all year while consolidating last year's rally. Such horizontal consolidation is usually a continuation move, and we'll look for a breakout in the direction of the previous rally. MACD gave a "buy" signal in November.
So, let's see where the short-term pullback takes us. It will be short-term pain for existing positions. But it also may be a great buying opportunity.
Some other news worth reading
Pullback, Sure. But Odds of a Large Loss in December Are Low: http://fat-pitch.blogspot.com/2014/12/low-odds-of-big-fall-in-december.html?spref=tw …
Silver's largest intraday move in two years: http://ln.is/www.marketwatch.com/Xw5a0 …
There's No Telling What This Oil Slide Could Do To Junk Bonds: http://t.co/A1xna51u7Lhttp://t.co/A1xna51u7L
It might not feel like it, but the US #economy grew at a healthy 3.9% pace last quarter: http://t.co/1jyw0QecLN