Russell 2000 Daily Chart with Current Implied Volatility Band Levels for Jan. 15, 2015
The battle between Buyers and Sellers continued during Wednesday's session with Sellers making a strong attempt to break prices lower but Buyers rushed back in at our Implied Volatility Bands support levels to postpone the resolution of a defined "Long Legged Doji" pattern. A close under or above the Doji pattern is required for resolution.
Although Buyers made a valiant effort to defend prices, the close under a cluster of moving averages (most notable is the close under the widely watched 50 day moving average) suggests that Sellers will return to make another run at breaking prices lower. If so, a confluent daily and weekly Implied Volatility Bands support level (1159.31-1163.91) could offer another opportunity to buy weakness if market breadth is not too extremely negative.
Overnight has been very active with both upper and lower level Volatility Bands tagged. Prudent traders will be a bit more cautious today as the overnight volatility will very likely continue during normal trading hours.