Tag Archives: weekly cycle bottom

A Rare Regime-Change Economic Policy Is Under Way

On last Thursday (10/08/20200) we sent out a private note stating that the small cap Russell 2000 index is breaking out in the midst of fiscal stimulus package negotiation.  This is the first time ever that the Russell 2000 index is outperforming the Dow and S&P 500 since the Russell 2000 index topped in August 2018.

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In Wait and See Mode

Since the NASDAQ found the bottom around 10500 level, it bounced anemically last week.  All three indices managed to produce a weekly gain last week.  But the cycle indicators are not presenting a picture of a finished bottom, meaning the bounce from the support level is a mechanism of trading, rather than investors initiating new positions.

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S&P 500 Cash Index Cycle Location 06/12/2020

Last week the S&P 500 had more than 7% correction.  It took out the previous week’s high and low, but unfortunately it didn’t close below the previous week’s low on the weekly bar.  This is an outside reversal weekly bar, but not the best kind of outside reversal bar.  It needed to close below the previous week’s low to qualify for a text book outside weekly reversal.

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The Reopening Trade

The market has spoken by producing an outstanding week on the 10th bar from the weekly cycle low which took place on March 23rd.  The magnitude of the bounce in price and time establishes that the March 23 low is a four-year cycle low.  Since the Nasdaq took the lead to make an all time high, which establishes the basis for an

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The Unknowables of Covid-19

In the last two weeks, the S&P 500 essentially chopped around the range established after the Fed nuclear option (buying junk bonds) announcement.  Underneath the three indices, there are vastly different performing sectors reflecting the new Covid-19 driven economy and the related stock performance.

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