The Nikkei 225 continues to show relative strength and has one of the cleanest absolute trends of the global indices I track. It's already breaking out ahead of the US and European indices, which suggests to me we could see them follow it higher in the next day or two. If you're trading the equity indices --- keep your eye on the Nikkei 225 for clues.
The S&P 500 futures are trying to get above the top of their range at 3804. The last hourly candle closed above it and we're seeing relative strength from the Russell 2000, Nikkei 225, and other indices here in the US and around the globe. Testing the waters here if I can get an entry at 3805 and look for upside towards 3855 over the coming hours/days. My stop is...
Using this weakness and the major indices trying to dig in here to look for a move back towards the top of their range. Using this failed breakdown on the 5-minute chart to define my risk and as a catalyst to get some upside going.
In this video, I discuss the different performance between leaders like the Russell 2000 + Nikkei 225 and laggards like the S&P 500 and German DAX, as well as what's driving it. I also update my thesis on the upside breakout on the S&P 500 and how I'm looking to trade it if/when we get a move above 3815-3817.
Looking for some continuation of the rally since the cash open. Need to see a breakout above 3804 to confirm that, so I've got a buy stop in above that level with a stop just below the recent low and a target of 3820. If it doesn't trigger, all good. Will wait for a cleaner setup to develop. Max position size based on the current reward/risk is 6 contracts, but...
While the large-cap stock indexes like the $SPY $SPX $QQQ $DIA have been running higher, they are now at resistance and should stall out or at least slowdown. Small-cap stocks have been building a base for a mega rally that could make the large-cap run look like chump change!
See more analysis on the small-cap sector: Click Here