The Gilmo Report

June 14, 2020

June 13, 2020 11:00 pm ET

Wednesday’s report turned out to be only too prophetic as the market split wide open the very next day. The Big Three market indexes all slid more than 5% with the Dow leading the way with a -6.90% bust. The small-cap Russell 2000 Index was hit even harder, plummeting -7.58%.

The chart of its proxy, the iShares Russell 2000 ETF (IWM), shows that the Russell 2000 was already weak as I noted in Wednesday’s report. At that time, it had rolled below its 200-dma, and after Thursday’s big price break remained below its 20-dema on Friday.

 

 

An early gap-up rally looked to be in jeopardy twice on Friday before the NASDAQ Composite Index was able to find its feet and close positive on the day. After Thursday’s higher-volume price break off the peak, the index essentially bounced back and forth between its 10-dma and 20-dema on lighter volume. This remains a fluid situation in this current position with the potential for lower lows coming into play.

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