Futures took a hit as Asian markets sold off in heavy volume.  The Shanghai Composite led all decliners falling more than 5% on its highest volume ever.  Hang Seng was down two percent.  While not as extreme European markets were lower by 1-2% putting pressure on the US markets.  The first half hour of trading was a bit volatile, but would give way to buyers pushing the indexes higher. 

Small Cap stocks were the biggest winners on the session.   Volume on the exchanges was mixed with NASDAQ volume lower on the session while the NYSE saw its volume rise on the day.  Today was a really solid session as we were able to shake off some nasty selling.  We did take out last Monday’s low, but found support in a big way.  Odds are certainly in favor of this market resuming its march higher.

Two stocks we highlighted last night as potential shorts showed a bit of strength today.  NFLX and AMZN are not out of the woods, but it was that type of day.  Shorting is a dangerous game and if you are not quick enough you can really lose your shirt.  Volume on both stocks was not overwhelming to signal strength.  Price action was solid enough to show these two are unlikely to cut through their pivotal points.

One big positive for today’s move was certainly the strength we saw in Small Cap names.  The Russell 2000 has been struggling as of late and the action during the session certainly points to the potential of the index breaking into new high territory.  Lagging on the session was the Dow Jones Industrial Average.  We really have not seen this in quite some time.  For much of the year the story has been how much small cap stocks were lagging behind the broader market.  Perhaps the script has been flipped.

If volume had been higher across the board it would have been a strong signal this market is going to push higher.  Odds still favor higher prices, but just not as big as if we had big volume.   Now, we need to see some follow through.