1 - Per Predictive/Forecasting Model, underlying force continue to favor bulls 2 - Support near the 77.61 handle offers a probable rebound level 3 - Forecasting Model eyes 01 AUG 2016 vicinity as probable timing in rally 4 - Invalidation: Break of 68.99
Best,
David Alcindor, CMT Affiliate #227974 - Alias: 4xForecaster (Twitter)
1 - The predictive analysis and forecasting is expressed from a model that leaves me no discretion in terms of interpretation - I simply post what it tells me to post. This is a quantitative system that speaks, and I do the typing
2 - historically, the more junior companies which are typically listed on the Russell 2000 will provide early signals of total market direction. In my own observation, and perhaps in that of other traders keeping an eye on broad-based indices, Russell 2000 will move counter SP-500, and counter US-30 ("Blue Chips"), in such a manner that SP-500 will then move in the direction of the Russell 2000, and finallt, the Dow (US30) will move in the direction of the SP-500 - This has a lot to do with market capitalization of the underlying companies, whereby the smaller remain swifter in directional moves compared to the larger ones which remain proportionately laggards.
Is this making sense?
David Alcindor
4xForecaster
⋅
@Nando - Here are two easily found and interesting articles on the topics of divergence between smaller and larger cap indices, and how relative price action is interpreted in terms of risks aversion and position rotation:
Here is an article that refers to this leading indication of smaller caps versus larger ones - And a quote from therein:
Why Small Caps Are Better Than Large Caps
- "To some investors, the underperformance of small caps in the last few weeks is a canary in the coal mine for blue chips and the market in general."
(Source: investorplace.com/2011/01/small-caps-beat-large-cap-stocks/ )
[Above articles were queried in Google as "russell 2000 versus s&p 500"]
Best,
David Alcindor
Sunny88
⋅
If so, can we long spy and short iwm at the same time for a short period?
Nando
⋅
Thank you for your reponse, yes
4xForecaster
⋅
The way I look at it is that smaller cap companies are swifter to respond to deleterious market conditions, having to lay off sooner since they do not carry the cash/assets to weather adverse market conditions which the larger cap companies are capable of withstanding. Plus, there is ego: The smaller cap do not have the same luster that larger caps are carrying, so they are more likely to "fold" than the more complex, heavier playing companies who perceive themselves have bellweather of the entire market in the industry and often countries they might represent.
In any case, I do not use these indices other than foretellers - For instance, a decline in the Russell 2000 may foretell something of an upcoming resistance in SP500, which in turns is likely to tell me something about the behavior o the USD vs. JPY pair, since the two are more often correlated than other Forex pairs.
So, the rational here is to have some light degree of insight into intermarket correlations, and see whether the bar brawling in one corner of the street can carry over to my neighborhood.
Best,
David Alcindor
A-shot
⋅
Is this violated?
4xForecaster
⋅
Hello @2use:
Item #4:
"4 - Invalidation: Break of 68.99 "
David Alcindor
A-shot
⋅
Not sure if i understand that it should be in line with the IWM forecast that is bearish all the way to 2018?