I know we are all waiting for Financial Armageddon and just trading Bitcoin and drinking Patron as we wait. It will be great for a while and then we will all wake up hungover and with everything stolen out of our wallets. But until then show me the next ICO and party on!
Oh, but just one thing about that Armageddon. What if it does not come? How long are you willing to wait to see if it happens? 1 month? 1 year? 8 years? Unless you are Zerohedge, Dr. Hussmann, Peter Schiff, Bill Ackman or TheRealFly on many days, you need to actually perform most of the time. That means assessing the market from a neutral perspective. And when you do there may be a real opportunity arising.
The Russell 2000 has been a real laggard over the past 5 week. For the crowd above that is a sign that the market is about to roll over. But if you follow the trend you probably see it differently. The Russell 2000 lagging presents an opportunity. The past 6 months has been a time of rotation. The Dow and S&P 500 have been plodding higher.
But the Russell 2000 and NASDAQ 100 have been rotating leadership. The transition back to the Russell 2000 does not have to start now, but when it does it projects a massive move higher. And the momentum in the Russell has reset lower while the NASDAQ 100 has momentum into overbought territory. The move up into this bull flag on the Russell 2000 projects to 1655 should it happen soon. That can buy a lot more Patron and Bitcoin. Maybe, just maybe, it is not time to bet on the end of the world just yet.
DISCLAIMER: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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