CLICK ON CHART TO ENLARGE
We all know by now the year got off to a rough start in stock markets around the world.
Transports and Russell 2000 are the leaders to the downside over the past 90-days. The declines of late took both of them down to 5-year rising channels, where they hit rising support two weeks and small rallies have taken place, after hitting support.
Now both of these weak links, are facing falling resistance at (1) above.
I humbly feel where we are a month from now could be a big deal, as these two find themselves caught between a rock and a hard spot (support and resistance).
If markets break above resistance, February could look the polar opposite of January.
If 5-year support gives way, February could look very much like what January did.
Keep an eye on these downside leaders, they should send important messages for the month of February and beyond!