Friday, April 06, 2007

Small Cap Forecast

Looking good now that we've come through the recent hard times - the small cap index (RUT/IWM) has turned up and continues to go up with a good divergence between the close and the pivot point. (Black line is the average 4-period pivot point and the red line is the average 4-period close).

The monthly shows yet another picture of good health.

The narrowing of the traces last month is just a macro result of the the downtrend you can see in the weekly chart.

I like using the weekly and monthly periods because they don't turn very quickly and they do show that once a trend is established it lasts for awhile whether it is up or down.

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