On the weekly chart, the Russell 2000 is clearly establishing a range between 680 and 700, when it strays above or below that range it is quickly brought back in, On the technical side, the 10wk ma is flattening, PPO is oversold and may flip, and weekly stochastics are coming off oversold levels. The short term bias is to the upside. Unlike the bottom callers on CNBC, I am not saying this is the “bottom”, but that we are likely to rally for a while here. How far, and how long? I have no idea.
The XLF is not nearly as bullish looking as the Russell. PPO is oversold, but still pointing downwards, stochastics are coming up off oversold, but they failed to hit 50 the last 2 times they did that. I am turning somewhat neutral on the financials, they might stop cratering here, but there is nothing on the chart that tells me this is going to reverse anytime soon. Besides the technicals, I still believe there are more Bear Stearns waiting out there for us.