Let’s go back to the leaders of this latest rally since November, the high beta small caps in the Russell 2000 Index. The ETF for the Russell, presented below, indicates the Bollinger Bands are pinching in on the 30-minute timeframe after a long, tight sideways base. Resolution to the multi-day consolidation is now likely to happen soon.
The issue, of course, is in which direction we resolve. Given how obvious the flattish nature of the market has been, I would not be surprised to see a head-fake in one direction before a reversal for the true move. For now, the bulls still hold the initiative with the indices at or near multi-year highs.