While the last few days we've seen a strong reversal from the calamitous lows below SPX 1040, the rally seems to be losing steam. Trading volume has been quite weak, see chart. While this does not mean a sell off is on the cards, it does imply that the market is looking for a reason for continuation. Earnings releases will provide the fodder (or not) for the market sentiment. Alcoa reported a good quarter today, beating analyst estimates. This is quite interesting as the company is linked to manufacturing and could signal a recovery. We'll look for confirmation in the days to come.
Looking at IWM, the midcap etf, we can see its trading in a channel and the SMA(50, 100) haven't formed the death cross although the pattern is a bearish falling wedge with lower lows and rallies on declining volume. It might send us lower.
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