Sunday, May 18, 2014

It's 50 - 50

SPX, DJI and DJT jumped early in the week and set all time highs before they lost their gains later in the week.  On Thursday and Friday, RUT successfully tested its April low while all remaining 4 indices were not anywhere close to their April lows.  That divergence is bullish and signals a high probability that a bottom for RUT has been put in.

Chances are good that SPX rallies pass its PDL and challenges its recent high around 1900.  Chances are also good that we we see NAZ and RUT rally along side of SPX as it reaches 1900 again.   What happens after that depends on whether or not NAZ and RUT significantly out perform SPX.  If they do, chances are good that rally continues to SPX 1925, otherwise all major indices would be heading south.

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.