RUSSELL STILL SUFFERING CORONAVIRUSAsia session saw a small long retrace
VENUSLIVE LEVELS INDICATOR STILL HOLDING THE TREND SHORT
RUSSELL 2000
THE RUSSELL EXPOSEDSmall caps stocks may be continuing their rough down spell.
PIVOT ALERT holding short for now.
Home Bancshares (HOMB) long.All description on the chart.
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HD Supply Holdings (HDS) long.All description on the chart.
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Citizens Financial Group (CFG) short.All description on the chart.
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TZA - Short this flawed -3x ETF with stop just above R1This is triple leveraged inverse Russell 2000 ETF. It is flawed due to negative compounding in downtrends.
Diary | 2/5/20 | RUT SpreadDescription:
Selling into some weakness on the RUT.
Justification:
- Directional Play? No, neutralizing delta's on existing RUT positions.
- Technical: Below the 20 and 50-day moving averages.
- Fundamental: Bullish long-term.
If/Then:
- Take profit? @50%
- Where will you hedge? $1725
Strategy Details
- Short and Long legs: $1615, $1600
- Short Delta: 0.14
- Duration: Feb 21 Expiration
The Kraft Heinz Company (KHC) long.All description on the chart.
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TNA - Buy and hold to $130-135The third major buying opportunity of this security's life is now. If the coming advance mirrors the previous advance, then $130-135 should be hit (see the two back-to-back Fib drawings). This is a monthly chart and the security is volatile, so expect plenty of choppiness along the way.
Break and restest of channelBreak was on higher than average daily volume. If retest is successful and we don't fall back into the channel resistance should turn into support. Monday will tell. Flat for the weekend. Next target $169.
RUT - breakout is finally hereRUT russell 2000 is at a new 52 week high
breaking above very hard resistance and consolidating above 1600
retested area which acted as support and now breaking to new highs
looking at the S&P as comparison RUT is lagging and looks like running in the next few weeks
How the Russell 2000 indicates a correction in the S&P 500The Russell 2000 small cap index has been a prevalent lagger throughout the whole US equity rally into all-time highs. This is of concern for the health of the economy and the health of the S&P 500 index. The small-cap sector reacts the most to economic conditions and monetary policy, being the most affected if they cannot make new highs and are over 8.5% away from all-time highs we can infer that a stronger correction of 8-10% may occur in the S&P 500.
The S&P 500 is full of companies that have been artificially inflated by stock buy-backs and also monetary policy allowing for cheaper borrowing. There is a healthy retrace coming out to catch down to small caps since they have not relished in the strong economic conditions. Which presents another concern, is the economy that strong to begin with? If there is a correction, there could be more buyers in both the S&P 500 and Russell 2000 companies to help markets reach all-time highs yet again.
Are small caps telling us something?Disclaimer: The above is just an idea for your entertainment, not a trading advice!
