Chart of the Day - Thursday, July 27, 2023

Today's Chart of the Day was shared by Mike Zaccardi (@MikeZaccardi). The major indices gapped higher this morning and sold off throughout the session. As a result, their daily charts have formed bearish engulfing patterns. Mike points out that the Russell 2000 ($IWM) engulfed the prior seven days of price action today. The Russell 2000 was also rejected at this level in August '22 and February '23. This suggests weakness in the near term. However, daily candlestick patterns have little relevance to the long-term trend.