As The Illusion Continues in Large Caps – MidCaps and SmallCaps Appear Troubled

As markets torture bears and the over-abundance of shorts established from the near the lows of August and September, Mid and Small Caps are showing obvious signed of struggle. While there is a possibility of an overthrow of the resistance cycles on the daily charts shown below, this does not likely impact the results that dramatically in that a failure at the previous impulse breakdowns (cyan) is likely to sent the markets to new lows. Ironically a test overthrow of the cycles would fit the MSP published earlier for the equity markets. However, this is NOT necessary and given the profound struggle going on in these indexes versus the Nasdaq, S&P and DOW things can take a turn for the worse at any time and the concept of a left translated turn into the MSP inflection points is a not insignificant possibility.

MidCap and SmallCap Daily Cylces

MidCap and SmallCap Daily Cycles

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