U.S. Index Update
U.S. indexes have pulled back a bit in recent days. There isn’t really anything new to report, but I thought I’d update the way I see the charts. The S&P is still in the body of a multi-year rising wedge. It has pulled away from overhead resistance, and has rising support around 1800-1820. Until that support is broken, I am trying to keep my bearish sentiment constrained.
The Russell 2000 has exploded higher over the last year. It has broken under a smaller rising wedge, but looks to have support about 4% below the current price. I am short IWM (and long RWM calls).
In the short term (and very long term), I have a bearish outlook for domestic equities. However, the charts are far more appealing in many commodity sectors and emerging markets.