Usually small cap outperforms at the end of a bullish cycle. When a bearish cycle starts, small cap stocks were sold fast and investrs flock to safety by selling small cap and buying blue chip stocks. Russel 2000 has been outperforming S&P lately but it will not last specially if maket sells off and investors start to run away from risky sectors to healthier stocks. Based on the assumption that no deal is on short term horizon, I recommend shorting Russel 2000 than shorting S&P 500. IWM is an ETF fund that follows Russel 2000. TNA is 3X IWM and TZA is -3X IWM. Do your own research before any trade. I am very patient on my trades so if you are in a hit and run kind of trades , you might get dissapointed and might think that your trade is not working.
I track the long-term cycles just for farts and giggles, and truth be told, tech has already topped this cycle. I tried posting the chart but it's too damn big.
Dumb money has flipped from bear to bull in record time: http://www.zerohedge.com/contributed/2012-12-23/investor-sentiment-certain SPY has been on a solid up trend for the past year; full 5 waves & sentiment is known to get uuber bullish during the B wave immediately before the double top.... :eek:
Of course...and now EVERYONE is correct on their bull/bear call. I think we are setting up for a huge zigzag....which will be down, then up. Astute traders will line-up their trades accordingly. Trend followers, as usual, are likely to be disappointed...and/or stopped-out.
I have a Christmas present for most of analysts and some of Elite members specially senior ones. That is "SHAME ON YOU" that you could not see fiscal cliff is coming and there will be no resolution for that. It was soooo easy to predict that it won't happen. Put your foot in the house rep members. You have to choose between US economy or your job (getting elected next time). You choose yourself.