The NQ8 stocks had a slight bounce on Friday and their Active Boundaries indicator pulled back down slightly without crossing above the 110 level - A level from which buying has worked well in the past few years.) We can see that by mid of June, we had a similar small bounce that lasted a few days, before experiencing another selling wave.
Small caps are not at all under selling pressure here, which in itself is a poor sign for the NQ8: if we believe that pair trades and index investing constituted an important part of trading activities, then small caps attracting money might indicate that the largest caps are being sold.
Note below the interesting article of Husmann regarding markets internals. This might also indicate a pair trade reversals as the most popular high liquid stocks are sold.
http://www.hussman.net/wmc/wmc170814.htm
The IWM/SPY ratio hit the bottom of its envelope, indicating a high probability for a small caps bounce. Probably a good time to buy IWM calls for those who want to ride a bounce.
Of course, we all know about the NK issue, which is highly unpredictable as both the NK and the US presidents seem to make it a personal affair.
In such a condition, gold has been attracting good money. However, the US$ seems to be much weaker than we would have thought of a safe haven currency.
Note that gold miners are only slightly bullish here compared to the strength in gold itself. I would not be buying the gold miners here.
Materials look very weak. However, a trade war with China should normally help US steel stocks though, which is a big constituent of that sector.
Conclusions:
Today's coming bounce might be a fake move, but I believe that it is worth buying some stocks that look cheaper than before, but that are under accumulation. XRX and IGT might be in that position, as both stocks have almost pulled back to the base of their latest earnings triggered breakout.
