Russell 2000 - Please Stop Buying It
Updated
Pick any path you want, none look appealing from a bull's perspective.
I created this chart today because I found incomprehensible that the Russell tape kept getting bought aggressively into today's close. Forget about the fact that this index has tested the lows of this triangular range (black date range above) several times, but what is more troubling is that these are small-cap companies trading at what used to be Blue Chip prices, like a year ago.
Small caps should be respected for their bearishness; they are the first to get punched when the indices agree downward and they are also the hardest to get punched. This makes sense because smaller companies are less likely to maintain operations during times of economic hardship due to a number of logical cash-flow-related items. Thus, while it hasn't been made abundantly clear by the media or US politicians yet (Europe is less delusional) that the economy is doing not-so-great, I find it ridiculous that the only index to get aggresively bought during this intensely bearish afternoon session was the Russell 2k.
This is a testament to how little people fear markets these days, or rather, it is that they have only experienced this 2020 rally and do not care/were not alive during the year 2008. The type of fear that has been omnipresent since January 2021 is that of FOMO. Typically, when people are fearful of transient, bearish price action, the natural reaction is to panic-sell. Well, it's now clear that we have entered a new age where it is human nature to panic buy the riskiest assets when markets show bearishness.
I only kid, of course - there is no actual no new age of anything. In fact, I'd imagine that it'll only take the first near-term apolcalyptic selloff to reprogram the market masses.
All I ask is that you not be long the Russell at times where it makes more sense to be long just about anything unrelated to stocks.
-Apigolyptic Selloff 2k21
IWM
RUT
GLOBALPRIME:US2000
SSMALL500
SMLL
SPX
IXIC
DJI
CURRENCYCOM:US500
CURRENCYCOM:US100
CURRENCYCOM:US30
RRVX
I created this chart today because I found incomprehensible that the Russell tape kept getting bought aggressively into today's close. Forget about the fact that this index has tested the lows of this triangular range (black date range above) several times, but what is more troubling is that these are small-cap companies trading at what used to be Blue Chip prices, like a year ago.
Small caps should be respected for their bearishness; they are the first to get punched when the indices agree downward and they are also the hardest to get punched. This makes sense because smaller companies are less likely to maintain operations during times of economic hardship due to a number of logical cash-flow-related items. Thus, while it hasn't been made abundantly clear by the media or US politicians yet (Europe is less delusional) that the economy is doing not-so-great, I find it ridiculous that the only index to get aggresively bought during this intensely bearish afternoon session was the Russell 2k.
This is a testament to how little people fear markets these days, or rather, it is that they have only experienced this 2020 rally and do not care/were not alive during the year 2008. The type of fear that has been omnipresent since January 2021 is that of FOMO. Typically, when people are fearful of transient, bearish price action, the natural reaction is to panic-sell. Well, it's now clear that we have entered a new age where it is human nature to panic buy the riskiest assets when markets show bearishness.
I only kid, of course - there is no actual no new age of anything. In fact, I'd imagine that it'll only take the first near-term apolcalyptic selloff to reprogram the market masses.
All I ask is that you not be long the Russell at times where it makes more sense to be long just about anything unrelated to stocks.
-Apigolyptic Selloff 2k21
IWMRUTGLOBALPRIME:US2000
SSMALL500
SMLLSPXIXICDJICURRENCYCOM:US500
CURRENCYCOM:US100
CURRENCYCOM:US30
RRVX
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Here's an EW Count that I just finished up. It is quite a complex pattern since March 2020, but figure I give it a go. This is unaudited, so keep that in mind:
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