Markets – Macro – Technicals

The Story Teller

Story tellerBoy they sure like to distract the kids. Shiny objects taking the shape of golden phones and $BABA and the 40 thieves throwing shares toward the masses like there is no tomorrow, but in the grand scheme of things it’s a predictable script.

Sunday night when futures magically filled the 1972 $SPX gap in mere seconds of the open I tweeted this projection to clients in the private feed:

SPY

Sure enough here we are 5 days later and markets continue to follow the analog structures I’ve been outlining.

Yet while $BABA is the great distractor, and Yellen is the “considerable time” extender, it is the $RUT that is the real story teller. I keep harping about the $RUT as it is NOT making new highs, continues to show weakness and will likely be the most impacted by a removal of QE.

This monthly chart tells the story better than I could express in words:

$RUT monthly

Market participants can of course choose to listen to the story or not. I, for one, find the story captivating.

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