From the Desk of Alfonso Depablos @Alfcharts
Sellers have a hold on equity markets as internal weakness expands and downside momentum picks up.
When looking for evidence of additional downside risk, some of the most valuable information we have is in the price action of the weakest areas. The rationale is that they should break down first and lead the rest of the market lower.
With how poorly the smallest stocks have performed this year, the Russell Microcap Index $IWC is the perfect signpost to help us determine the next move for stocks.
The chart below shows IWC resolving to the downside from a descending triangle formation. It just closed at its lowest level in roughly three years.