Russell 2000 cup&handle and sentiment

R

retaildaytrader

I made a call before about the S&P going to 1300 by August/September and it hasnt been behaving the way I would have liked. So I took another look to see whats happening. I looked at the Russell 2000 and noticed that price did not make it above its last high in 2008. It came really close and then it started pulling back hard. I suspect this is probably a cup and handle on the Russell 2000.



One thing to note is sentiment...its at a low. I follow the Rasmussen Investors Index along with a few other sentiment indicators. The following charts are not mine and the rules of this board do not permit me to post a link up to their source.



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So I think this is just a pullback and we will get our spike to 1300 soon enough. Sentiment seems to be at a low amongst the investing public (Rasmussen conducts daily telephone polls) and the AAII.

I also took a look at what Bulkowski has to say on the cup/handle. Here is what he says:
http://thepatternsite.com/cup.html

A few other things auto sales. This looks like its about to take off:


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I am just posting this to see what everyone else's opinion is on the issues. Just a disclosure, Im just a mean ole man with a gut...the type that Jesse Livermore cautioned against taking advice from so do with the above information what you will.
 
This is a pretty good excel spreadsheet of the Anxious index. You have to start worrying when the graph starts turning up. Draw your own conclusions about this graph. This graph, in my personal opinion, shows no indication there will be another recession.
 

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Quote from retaildaytrader:

I made a call before about the S&P going to 1300 by August/September and it hasnt been behaving the way I would have liked. So I took another look to see whats happening. I looked at the Russell 2000 and noticed that price did not make it above its last high in 2008. It came really close and then it started pulling back hard. I suspect this is probably a cup and handle on the Russell 2000.



One thing to note is sentiment...its at a low. I follow the Rasmussen Investors Index along with a few other sentiment indicators. The following charts are not mine and the rules of this board do not permit me to post a link up to their source.



Uploaded with ImageShack.us



Uploaded with ImageShack.us



Uploaded with ImageShack.us

So I think this is just a pullback and we will get our spike to 1300 soon enough. Sentiment seems to be at a low amongst the investing public (Rasmussen conducts daily telephone polls) and the AAII.

I also took a look at what Bulkowski has to say on the cup/handle. Here is what he says:
http://thepatternsite.com/cup.html

A few other things auto sales. This looks like its about to take off:


Uploaded with ImageShack.us

I am just posting this to see what everyone else's opinion is on the issues. Just a disclosure, Im just a mean ole man with a gut...the type that Jesse Livermore cautioned against taking advice from so do with the above information what you will.
More...

Thanks for the charts. I agree (without referencing your graphics) that sentiment became very negative during the past month, at a very rapid rate. If there's not another "shoe drop" in the next couple of weeks...the path of least resistance is higher.

People were pricing in (almost simultaneously):
1) Possible Euro parity (in the near term)
2) Possible takover of BP, after another leg down in the issue
3) Possible swift/severe S&P 500 sHs neckline thrust
4) Possible Israel>Iran strike
5) Possible hurricane-induced US fossil fuel supply constriction
6) Possible parabolic gold upleg
7) Possible EU member debt restructure
8) Possible S. Korea>N. Korea karate tournament...for keeps
9) Possible leading indicator collapse to -infinity
10) Possible dub-U recession pattern
Etc, etc.

I think that if we see one of the aforementioned happen, or a surprise shoe, we'll get shaken up again. If the next couple of weeks are quiet and boring (headline-wise), market should drift higher. Expectations are low, the participants are de-sensitized and can handle moderately poor news, but a shocker-headline might not bode too well. This is the story, it never changes: if x, then y, else z.

Thanks again for the informative graphics.
 
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