Markets once again registered very modest bounces off intraday lows this afternoon for a second straight session, but a 7 session losing streak is alive and well. Bulls can point to the fact that the combined drop is negligible, but bears can relish in the fact that if selling were to accelerate the indexes have that much more room to recede. Once again it was the small caps, which are leading indicators, dropping the most as the Russell 2000 fell 1.3%. The Nasdaq continues to underwhelm and is on pace for a third week in the last 4 declining more than 1%, and CLOSING at or near the bottom of the weekly range (heading into Thursday it is lower by 1.6%). We did discuss recently the importance of the consecutive MONTHLY doji candles this August and September and perhaps that warning sign is beginning to show itself. Lagging sectors included real estate, as the newly created XLRE was formed to rid itself of the financials and probably wishes it did not, lost another 1.55% and the utilities lost 1.3% via the XLU which is shaping up a potential bearish engulfing week. All of the major 11 S&P sectors lost ground Tuesday to demonstrate the broad nature of the fall, and it was the defensive staples group that “outperformed” today lower by .25%. The industrials and healthcare were the second and third best actors but still still lost .4 and .5% respectively. Below is the chart of an industrial ITW and how it appeared in our Monday 10/31 Game Plan and still looks like it offers good risk/reward here. Oil continues to slump, and I have never been a fan of the levered ETFs but the UWTI (notice it is 83% off recent 52 week highs) recorded a spinning top candle near the round 20 number and has put in a series of higher highs and lows since the beginning of August. The round 30 figure was resistance with a bearish shooting star on 10/19.

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