Monthly Update

I see it’s been a month since my last post, and I recall I was in quite the mood at the time.  Of course, I’m still in a mood, what with the American President apologizing to other leaders for our mistakes again, more money printing, and a baby due in about a week or two.  And I’m sick.

But, enough whining.  I’ve been inactive in the markets for a while now, and I’m using some of this down-time to organize my thoughts into a post.  Above, I’ve posted my Old Faithful, the IWM on a weekly chart.

My 34-MA is still pointing down here, and the chart looks like it can’t decide whether it’s in a Stage III or Stage I cycle.  I added the Stan Weinstein traditional 30-MA to compare, and it’s pointing up nicely.  That would make my Fibonacci-based 34-MA the only negative trendline I can see on this chart.  So I’m still not sure what to make of this market, yet.  RSI is only showing confirmation of movement, and no divergence is apparent.  I’ve found that you can only trust RSI divergences only so far back in time, but still not sure if a revisit to a price 2 years later merits a comparison of RSI levels.

Zooming in to the Daily chart shows a Stage II rally in Jan and Feb, while spending the time to let the MA’s catch up.  This is healthy for a solid continuation upward, but I’ve also seen these pauses breakdown.  RSI might signal the next direction soon.  Very interesting how the drop down was not allowed to stay there for long, and we’re back into the upper “comfort” levels.  Let’s zoom in a little more.

The hourly shows a nice V-shaped recovery that the talking heads like to keep mentioning.  No RSI divergence yet, nice recovery from Bollinger Band violation, moving back to center and the MA’s are up.  This Market looks positive.

However, I don’t plan on making any moves until we leave this trading range.  Last week’s dip was almost like a mercy-dip to make the rally not seem “AS” manipulated and out of whack as it is.  I’m very pessimistic about the rally overall because I don’t feel the fundamentals are truly there.  But hey, my opinion won’t stop the rally from happening.  So, just go with it.