Seems the ER2 "reaction down" is in play (so far about -2.5% vs. SP500)...anyone updated the chart Lorenzo posted (page 2)? I am trying to figure how much more underperformance to go for the Russell2K vs. large caps?
small stocks (Russel 2K) outperforming again for the last two trading sessions... I think it is a fake and getting close to fade again...
Russell 2K showing similar pattern to beginning of October...it failed to make a new high and sold off big..so unless it goes on to make new highs, I'd look for some serious selloff...just my 2c
Today Russell 2K (and S&P) failed to break through the previous high...looks to me that a top is in place...given the complacency in the equity markets, it looks to me that time has arrived for a serious selloff. Any thoughts?
How is the current trade any different than what you see for late December on your chart above? I'm no expert chartist but I see very little to tell me that you have enough to arrive at your conclusion. At least if you got short now, your risk is very close and easily defined by the last top. I guess I fail to see why anyone would approach the market with the idea of picking tops in such a big uptrend. Different strokes, I guess.
R2k will probably continue rallying into the end of the month but look for it to return to around or below current levels by mid-March. If you are looking for resistence points to sell against for s/t trades +10% gain in the cash since 12/30/05 mite be a good starting point...
Er2 "bottomed" a few days earlier than I thought and is now grinding higher into expiration of the march contracts. Would not be surprised to see a kiss at new highs (752 basis June) and before moving lower again. Many will be looking for a move higher into the end of the month, but it probably won't happen this month particularly if we stay "high" into the final week of Q1. Too many incentives for real money accounts to book 10%+ profits and move into large caps for Q2 outperformance.
Dealer, Your last call was pretty good and we got the selloff...however, I too didn't expect to see how short-lived that selloff was... As FuturesTrader71 pointed out earlier, it is a tough business trying to pick a top in an uptrend...yet I am attracted to it given how steep these selloffs can be compared to holding long steady... I agree w/ you that we will get another selloff soon ...eventhough ER2 has come back strong, it has started to underperform ES and also see negative divergences galore on the daily.