As we mentioned in our previous post, the Russell 2000 is the gold standard of stock baskets when it comes to predicting the moves of this market.
We were watching 2 critical levels in the Russell, the 900 mark for a move lower and the 950 mark for a move higher.
950 was breached, and the overall market just kept moving upward, much to the amazement of most analysts, who never predicted anything like this when they took an early look at what to expect in 2013. What's next is anyone's guess at this point. More upward momentum is possible in the near term unless there is a clear catalyst that sours the overall exuberance we are witnessing. Is this move way to much considering the economic conditions worldwide? Of course - but that's thinking logically. Money flow has nothing to do with logic. It has to do with what market participants think they can squeeze out of a trend. At some point that thinking will reverse the market direction, and money will be made by those on the short side. Once the big money decides short is the way to go - watch out. Keeping a close eye on those trend lines is essential in the next few weeks.
We were watching 2 critical levels in the Russell, the 900 mark for a move lower and the 950 mark for a move higher.
950 was breached, and the overall market just kept moving upward, much to the amazement of most analysts, who never predicted anything like this when they took an early look at what to expect in 2013. What's next is anyone's guess at this point. More upward momentum is possible in the near term unless there is a clear catalyst that sours the overall exuberance we are witnessing. Is this move way to much considering the economic conditions worldwide? Of course - but that's thinking logically. Money flow has nothing to do with logic. It has to do with what market participants think they can squeeze out of a trend. At some point that thinking will reverse the market direction, and money will be made by those on the short side. Once the big money decides short is the way to go - watch out. Keeping a close eye on those trend lines is essential in the next few weeks.
