One of the things I was looking for this week was indication that the bounce I anticipated was more than just a reflex due to extended breadth. I was looking for signs that buyers were returning to small cap stocks. While there has been a modest bounce on the Russell, the evidence suggest this might be short lived. When buyers are stepping in aggressively from extended zones there's a strong tendency for the number of stocks below their respective 20 day moving average to increase from approximately 20% to 70%+ in short order. As the following chart shows, this characteristic is lacking.
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| $MTMW |
Additionally the breadth indicators I follow will begin to increase sharply on the lower time frame from red to green across the board and often in short order. Instead, there is still a lack of breakouts on my time frame and higher time frames are vacillating.
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| MM |
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