For quite some time now, I have noted the relative strength shown by the midgets, a.k.a. small cap stocks, since the middle of April. As opposed to the broad market and countless other sectors and stocks, the small caps have yet to close below their respective 200 day moving average. Historically, the transportation sector and small cap stocks are widely seen as leading/confirming indicators. Thus, with both of those areas showing relative strength throughout this correction, I have been more apt to sit in cash than to put on short positions.
Excluding the fallout from the quagmire in the Gulf of Mexico via the attrocious performance of the energy sector, the small caps are notably weak today. As I am typing this, the broad indices are trying to stay green. However, the small caps are still one of the notable leaders to the downside today. The intraday and annotated daily chart, seen below, should show that despite their relative strength thus far, the small caps leave much to be desired in terms of being a long setup.
Keep a close eye on the midgets for the rest of the trading session. If they continue to roll over here, I suspect it will be a bad omen of things to come.
Thanks Chess. It’s nice to see a post that supports a trade (and analysis) I made earlier in the day. 🙂 We’ll see how the rest of the day goes. I still don’t like this market from either side however.
Yeah. I’d love to put on some sick trades, but cash is still king in this kind of market.
I will haunt your soul now, willis.
Whatchu talkin’ bout, Grim Reaper?
Believe it or not I went to heaven. I accepted Jesus on my death bed and was granted salvation. Take that bitches.
p.s. Hitler did the same thing. He’s surprisingly fun to hang out with! We’re clownin’ on Ghandi for being a dumb fuck heathen.
Love and respect your work so much – you’re a perfect fit here bro.
When the RUT recovers, it’s going to be a Small Cap disco ball, but until that time you’re 100% cash strategy is dead on the money.
Thanks for the kind words. You do great work.
Did you know gary colman wanted a burial at sea? They could not stuff him in the toilet so they went with burial in a shoe box in the back yard next to the dog.
That is about as funny as sitting in wet paint… Fool!
Have the decency to ban yourself forthwith!
Thx chessNwine… and a tip ‘o the hat, man!
Cash is now officially king!
As for the babies (IWM)… Risk appetite is taking a hike of late… and the MACD histogram hints at a third downleg??? Maybe???
Geez… dry powder is a wonderful asset class! Time to work on my slice! Ta-Ta… and thanks again!
Thanks, Jim.
Come, come sir. Gary was not a very nice human being, judging from the press he recieved from the news and his former cast members, when on tv.
Plain and simple, he was mean!
I dont think too many will mourn for long, but if you think that my suffering will be good for the soul, ok. I pause for two seconds to remember the good he put out. Times up!
Well, gary was just not as nice say, as Sandra Bullock, John Wayne, or John Lennon. His personalality was several levels below that sir, so go soak your head.
Consider it soaked, sir.
Still… I imagine that a lifetime spent at eyeball to crotch and ass level would have a tendency to make one less than civil… a condition John Wayne and John Lennon were able to avoid… I’m not sure about Sandra Bullock, who has been rumored to have adopted this position by choice, but am willing to give her the benefit of the doubt…
Sandra is a secret Zig Heil’er. She was the first person I visited as a ghost because I was wonderin’ about that whole situation right before I died. Turns out she’s got all sorts of arm bands and boots and shit in her closet.
p.s. I am still short in the afterlife. Fuck me!
If I can only follow one stock blog, this is the one!