A lot of people who analyze the market including portfolio managers will talk about supply and demand, or the battle between buyers and sellers. This could not be more evident in the Russell Tracking ETF (IWM). Since December 9th the IWM has been in a sideways trading range, whereas the NASDAQ has been up humongously since then.
The $RUT is charting some indecision. The rising highs but slightly lower lows suggests the range of indecision is expanding. On April 25th we see the chart gapping up to new highs for the first time in 7 weeks. April 26th the market trades higher but closes mid range. The following day shows an inside day and then a big push down on Friday April 28th as a blue candle. Essentially what happened here is the market ran out of buyers at new highs and the price fell back. We need to wait for the end of today to complete today's price bar, but the 2-month uptrend in Relative Strength appears to be breaking today. If nothing else, its suggesting we pay attention. The horizontal dotted line on the price panel touches the top of the December 9th price bar, and we are struggling to get back above this level again after surging to new highs only two weeks ago. Five months later price reads as unchanged. This 138ish level is a real support/resistance line.
Continue reading "IWM Shows The Battle Scene Pretty Well" »