Monthly Archives: November 2016

Watch the Small Caps

The iShares Russell 2000 ETF (IWM) formed a large bearish engulfing candle in Monday’s session that encompassed the previous two day range. It has rallied over 16% from its low early this month to its high last week and is technically overbought. The relative strength index reflects the overbought condition and the percentage volume oscillator, a MacD representation of volume, has made a bullish crossover and is below its center line. The small-cap stocks have led the broader market in the past and their price and volume action should be monitored carefully.


The Dollar Index Fund — Major Weekly Breakout

The strength in the dollar recently has taken shares of the Power Shares US Dollar Bullish Index Fund (UUP) through long term technical resistance.



A large two year triangle formed on the weekly chart and that downtrend line has been taken out in trading this week. The break out could be seen coming on the daily chart as the fund price compressed in smaller fractal versions of the larger triangle and then broke out in sequence from those iterations. The technical indications on the weekly chart are all positive and the pattern price projection, if achieved, targets a major upside objective.

S&P 500 – A Repeat of the June Rally and Reverse?

The S&P 500 index bounced off its June low at 1990 this year then rallied 100 points over the next two months to the 2190 level. After a month long attempt to break 2190 resistance it pulled back in a declining channel pattern to the 200 day moving average, and then rallied sharply this month again, breaking above the channel downtrend line and re-entering the 2190 area zone of resistance.
This latest move has no doubt expended a lot of energy and may require another period of sideways consolidation in the resistance zone, but one particularly positive technical sign is the reading on the Chaikin money flow indicator. It has crossed back above its declining 21 period signal average and its center line, reflecting renewed buying interest.