Small Cap Channel Broken

So……..is that it? Is the all-clear siren wailing? Has the third missile scare come and gone without a trace?

Figures.

Anyway, I’m typing this before the open, and it’s dullsville again. Equity markets are somewhat positive, and crude continues to have the jitters as Irma roars through the Caribbean.

My main focus is on the small caps, as illustrated with the IWM below. They have been in a strong uptrend ever since the February 2016 bottom, but that broke at the start of last month. In the past few weeks, there was a powerful counter-trend rally, but that may have snapped yesterday with a big bearish engulfing pattern.

This morning, naturally, we’re getting some fight-back from the bulls, but keep your eye on the longer-term picture.