Chart 2: Russell 2000 to SP 500 ratio
Small cap stocks (IWM) jumped the creek of resistance on 113 million shares nearly a week ago. This expected surge, not a surprise to Insight readers, anticipated by REV(E)'s breakout to new highs on 2/24.
- The message of the market is bullish. Any other interpretation is opinion. Opinion driven investment/market strategies, more often than not, lead to frustration.
- Support and resistance: Green arrow marks resistance to be overcome. 3/4's jumping of the creek (resistance) generated gap or zone of support. Investors/trader should be watching for bullish setups into support.
- Broadening rally: The russell 2000 to SP 500 has generated an intra month high. This temporary breakout suggests a broadening rally. Today's broadening rally reflects a confluence of strong international inflows (soon joined by domestic flows) and global economic recovery despite growing economic pessimism until 2016.
- COT matrix: Aggressive accumulation by the invisible hand on 2/18 anticipated the technical breakout above.
As a special thanks to the loyal Insights supporters, additional, market-driven money flow, trend, and intermarket analysis will be provided to Insight donors in 2014. This analysis will be revealed by an Insights key.
Paypal, a leading provider of secure online money transfers, will handle donations. Thank you for your contribution.