Mid-Caps breakout of bullish falling wedge, acting strong!

 mdyspyratiofallingwedgebreakoutoct21

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I shared last week with Premium members that the Mid-Cap/SPY ratio appeared to be oversold, at support and looked to be creating a bullish falling wedge, which was a good place to go long MDY with a stop below support.

At the same time it appeared that the Russell 2000 was in a similar bullish situation, as I shared that small caps were due a rally one week ago at See It Markets, a day before the key reversal wicks took place last Wednesday in SPY & TLT shared on Stocktwits (see reversal wicks here) 

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Junk Bonds-Bullish wicks, Bouncing Off Support, With Momentum Oversold

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Junk Bonds are often looked at as leading indicators for key moves in the stock market.

Popular junk bond ETF's JNK & HYG have declined over the past few months, taking them down to support levels and pulling momentum down with them.

The above charts are weekly views of these ETF's, reflecting that both of them created bullish wicks at support with momentum the most oversold since the 2011 lows.

At the same time Junk was hitting bouncing off support lines, our proprietary "Shoe Box indicator" was hitting 5-year support levels and started sending off bullish signals the first of last week, while stocks still remained soft. 

From a message perspective, this type of price action from the junk arena is usually a positive for the stock market.

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S&P 500 and VIX produce bullish and bearish wicks, surprise anyone last week?

 spybullishwickvixbearishwickresistanceoct20

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Does it surprise you how much these patterns and price action looks very much the same in the S&P 500 and NDX over the past few years?

Time will tell how key last week was, as both stock index's were at support, creating bullish wicks and both fear index's did the opposite, creating bearish wicks at falling resistance.

Premium Members shorted fear last Wednesday due to the patterns, with stops on this new position at fear resistance levels. 

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