ER2 has topped?

[murray t turtle]

Quote from FuturesTrader71:

The ER2 has had a much stronger and much more independent run up than the other equity indices. The rally on Friday morning showed a lot of good volume printing on the offer on the way up. Once it peaked, there was a tremendous amount of selling of any attempt to push up. The tape never lies and I trade by it. The move seemed to act more like a blow-off than another impulsive move.

Like Mike, I don't argue with the market and I don't hold overnight positions. Many have cried "top" throughout the run-up in this and other markets and they have been proven wrong. I think it is expensive to try to call turns before they happen. The real and low-risk meat of the move is after the turn has happened and there are no signs of that yet.

A recent quote I read and that I like says, "Markets can remain illogical far longer than you or I can remain solvent." It is better to wait for confirmation.

=================

Agree;
strong uptrend.

NQ contract looks much weaker today;
looks much weaker all year,
underlying stocks group still in long term downtrend,
medium term downtrend/ same for QQQQ, many teks.

 

[lynx2004]

Quote from Lorenzo:

Found this chart in another forum

It seems that the small caps tend to show strong overperformance during the year as regards the RUSSELL 1000 and the RUSSELL 3000

When this happes we begin to see some huge divergences that bring the RUSSELL 2000 to reduce the distance with strong corrections

Hope it helps

Nice chart...anyone has an updated one to present? (I don't have a charting program to do this neat depiction of divergence and convergence of small vs large cap....thx.

 

[lynx2004]

Yesterday and today, lot of talk on CNBC relating to how Russell 2000 (small caps) is kicking butts of large caps...
Is it enough of a contrarian indicator?

hmmm....

 

[Mike805]

Quote from lynx2004:

Yesterday and today, lot of talk on CNBC relating to how Russell 2000 (small caps) is kicking butts of large caps...
Is it enough of a contrarian indicator?

hmmm....

Sold short 5 @ 750.50 into the close. Who wants to fade me??? --- bring it on!! ER2 bent me over and has been nailing me all day...

Stop @ 753.20

 

[lynx2004]

Quote from Mike805:

Sold short 5 @ 750.50 into the close. Who wants to fade me??? --- bring it on!! ER2 bent me over and has been nailing me all day...

Stop @ 753.20

It will be interesting to watch this next week (after futures expiration today)...yesterday and today, er2 actually got weaker towards the close (relatively).. it seem to be running out of steam since the beginning of March (eventhough it was making new highs). Negative divergences in oscillators (macd and also money flow) on the daily chart. Longer term weekly chart however looks pretty solid (uptrend). I usually trade w/ a mental stop wider than yours but I agree with you that some impending weakness is on the horizon.
All the Best!

 

[lolo24ca]

Quote from lolo24ca:

WELL SO FAR SO GOOD FOR YOU... BASED ON MY ANALYSIS...I'M BEARISH FOR NEXT WEEK ( AT LEAST FOR MONDAY AND TUESDAY). CHECK THE CHART BELOW...CORRECT ME IF I'M WRONG

OOPS !!!HERE'S THE CHART

 

[Mike805]

Taking a couple contracts off the table at 747. Moving my stop to breakeven and going to let the rest ride. Seems like we've established some conditions for a major S break through 746.60. I would think that a good break down to 745 would entail a stronger move, possibly to 740.

Mike

 

[lynx2004]

Quote from Mike805:

Taking a couple contracts off the table at 747. Moving my stop to breakeven and going to let the rest ride. Seems like we've established some conditions for a major S break through 746.60. I would think that a good break down to 745 would entail a stronger move, possibly to 740.

Mike

...thought today might start the slide but then again it became a nothing day...wonder if the market is heavily shorted that it can't make its move down...may be it will take the long way home shaking longs and shorts alike. Daily ranges have been so narrow for the longest time, my patience is running out. Good luck on your short not getting shaken out.

 

[Mike805]

Quote from lynx2004:

...thought today might start the slide but then again it became a nothing day...wonder if the market is heavily shorted that it can't make its move down...may be it will take the long way home shaking longs and shorts alike. Daily ranges have been so narrow for the longest time, my patience is running out. Good luck on your short not getting shaken out.

Hey thanks lynx - I didn't post earlier but my B/E stop was taken out at 750.50 so I am out of this trade with a small profit on 2 out of 5 contracts. I too was expecting a slide but things held up at 746 so that made me a bit suspect to any further downside. Today was an interesting day however, similar to Friday IMO, where the ER2 is still trying to figure itself out. We may see several days of this type of behavior, but, any breaks above 754 or below 746 should have some continuation. My objective at the moment is to seek low risk peaks and valleys.

Good trading to you,

Mike

 

[lynx2004]

Quote from Mike805:

Hey thanks lynx - I didn't post earlier but my B/E stop was taken out at 750.50 so I am out of this trade with a small profit on 2 out of 5 contracts. I too was expecting a slide but things held up at 746 so that made me a bit suspect to any further downside. Today was an interesting day however, similar to Friday IMO, where the ER2 is still trying to figure itself out. We may see several days of this type of behavior, but, any breaks above 754 or below 746 should have some continuation. My objective at the moment is to seek low risk peaks and valleys.

Good trading to you,

Mike

Good to hear you made some $$ -- yes, the next few days will define which way its headed...it could be more probable Russell2K is headed down for now...


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