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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
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Dots

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Saturday, May 17, 2014

Small Caps in the Midst of Turbulence

The following Year-to-date percentage gained/lost graph of the Major Indices shows that the Small Cap Index (Russell 2000) has dropped by 5.22% since January 1st of this year...a significant variance from the others.


The next percentage gained lost graph of these indices shows that Small Caps continued their weakness in last week's trading.


The 5-Year Weekly chart below of the Russell 2000 e-mini futures index (TF), shows price sitting on the 50 week moving average. The weekly Volume Profile along the right side of the chart shows that price rallied last year on thinner-than-average volumes down to the POC level at 827, as does the volume histogram overlayed along the bottom of the chart. Momentum has been accelerating to the downside, as have the Stochastics and RSI.


The following 1-Year Daily chart of the TF shows that price is sitting at major price support and below the 200 daily moving average, as well as the POC of the daily Volume Profile at 1116. All 3 technical indicators are still in negative territory, with no reversals to the upside yet. Volumes are thin below current price down to the 980 level, as shown on the Volume Profile.


The following 180-day 1-hour chart of the TF shows a closer look look at price support around the 1080 level, with price below the declining 50 and 200 hour moving averages and the monthly VWAP, as well as the hourly Volume Profile POC at 1116.

I would suggest that a failure to rally and hold above 1116 may lead to continued weakness in Small Caps, which could drag down the other Major Indices, particularly if Technology takes a turn for the worse...two markets to keep a eye on over the coming weeks.


Have a great weekend and best of luck next week...the Canadian markets are closed on Monday for the Victoria Day holiday.