Here is a monthly chart of the russell 2000, a very well defined trend line. the last three times it hit the top trend line, there was a significant correction that followed. This time, with massive QE, it blew out the top of its trend line.
Do you believe in mean reversion? or is this time different?
3 significant points are converging on this chart:
1) this top of this 20 year trend line
2) the lower range of the topping pattern being put in for the last 8 months..
3) the 200 day moving average is..
If it breaks this level, it may have much farther to go. This play may be the best way to short the market as there is no distortion in this index from mega-cap tech stocks (FANG)..
happy trading!
Do you believe in mean reversion? or is this time different?
3 significant points are converging on this chart:
1) this top of this 20 year trend line
2) the lower range of the topping pattern being put in for the last 8 months..
3) the 200 day moving average is..
If it breaks this level, it may have much farther to go. This play may be the best way to short the market as there is no distortion in this index from mega-cap tech stocks (FANG)..
happy trading!