Small caps pulled back, but this attracted good money. I guess these are shorts covering ahead of tomorrow's expected tax announcement.
Note below that the IWM/SPY ratio touched the bottom of its envelope, where it was a good spot in recent past to cover small cap shorts and start building long positions.
Note below that money is supporting 10-Year Treasuries, but that the Yen is forming a negative divergence. This might also indicate that Japanese investors are not pulling money from US markets.
Conclusions:
Today is the last day of October. This alone should be positive for equities. Small caps were bought ahead of tomorrow's tax announcement. The real question is what will happen afterwards. Content is a well-known secret and hence must be priced in. I suspect that algos will try to build a price spike in the announcement, but that negativity could rein things in after the initial bullish reaction.
