Chart Dump

Chart Dump

Let’s start with a top-down view by looking at the R2K. Yesterday’s tax plan-fueled rally in the major indices helped launch it significantly higher.  In the process, the index managed to smash through multiple years of upside resistance.  This resistance…...

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Russell 2000 Finalizes Bearish Topping Pattern with Significant Breakdown to Start 2016

Russell 2000 Finalizes Bearish Topping Pattern with Significant Breakdown to Start 2016

Per the chart below, with today’s material break-down in global equities, the Russell 2000 appears to have completed a major, bearish, head & shoulders topping pattern that has formed over the past two years. Similar patterns formed around the index’s…...

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Repeating Pattern in the Russell 2000 Suggests End of Bull Cycle Upon Us

Repeating Pattern in the Russell 2000 Suggests End of Bull Cycle Upon Us

I believe the R2K has been in the process of completing a major topping pattern since early 2014, per the chart below, that is similar to the tops it put in place in 1997-1998 and 2006-2008. Each of those patterns takes…...

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Looking in All the Wrong Places: Why Global Equities are Set to Collapse (Part 2)

Looking in All the Wrong Places: Why Global Equities are Set to Collapse (Part 2)

Last Thurs in this post we explained that we felt that the DAX was foreshadowing a major global equity collapse along the lines of that witnessed in 1937 or 1974. In that post, we used this analog to justify the point…...

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Signs Point to Additional Near-Term Downside in Riskier Assets

Signs Point to Additional Near-Term Downside in Riskier Assets

In the chart below I plot the R2K over the past few years along with the Dow from 1989-1991 as well as a plot of the recent price action of the VIX. At (A) the R2K put in a fairly…...

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Risk Unwind

Risk Unwind

I had a post earlier today suggesting exposure to risk assets has been in the process of being unwound, but one need look deeper than large macro indices such as the DJI/SPX to see evidence thereof. I present the ratio…...

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Russell 2000 Faces Resistance on a Relative Basis & Could Under-Perform for Years

Russell 2000 Faces Resistance on a Relative Basis & Could Under-Perform for Years

Dating back to June of this year we have been suggesting that the potential for a longer-term reversal in the USD could lead to small-caps sustainably under-performing the broader market. We continue to believe this today. Even if the USD…

Russell 2000 Forming a Classicly Bullish Technical Pattern That Should be Resolved with Higher Prices

Russell 2000 Forming a Classicly Bullish Technical Pattern That Should be Resolved with Higher Prices

The Russell 2000 is forming a classicly bullish cup & handle pattern in the chart below. We typically hesitate to talk about technical patterns like these as we believe they are the purview of bloggers/market practitioners that use only technicals…

Is The Russell 2000 Now Working on a 1995 Style Break-Out?

Our earliest posts on the R2K were directionally bearish in nature. On 5/30 we suggested the index’s path of least resistance was likely down. A month later on 6/27 we then suggested downside risks remained elevated over the intermediate-term. Neither…...

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Recent Under-Performance in Small Caps Likely Portends an Inflection Point in Broader Risk Appetite

Recent Under-Performance in Small Caps Likely Portends an Inflection Point in Broader Risk Appetite

The 26 week RoC in the ratio of the R2K vs. SPX is -768 bps as of yesterday’s close. In the top pane of the chart below we highlight where small caps have under-performed large caps to this degree of greater since…