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Currently the stock indexes appear to be in the final stage of this vertical trending move since Dec 28th. While the expected correction may be brief and lead to new highs for the rally, I believe based on the technical picture that a sharp, but maybe brief pullback is imminent.
The chart of the Russell 2000 etf IWM shows what looks like an ending diagonal chart pattern completed with a very strong bearish divergence on the hourly MACD. While the Russell 2000 has been the leader, it has yet to make new rally highs in today's session, which may be another mild non-confirmation sign that this strong phase of the move is ending.
The other indexes have a similar appearance at this point. And the VIX is also not confirming this move higher in stocks, which is typical of short-term exhaustion as well.
The short-term target for the IWM would be to pullback to 88.90 at a minimum. We will probably see a larger pulback than any in several weeks. But based on typical technical tendencies, I would expect a move to a yet higher high before a longer lasting intermediate term to long term price peak.
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