GREENLAND – NOT REDLAND

Not red at all. All indices closed the week in green and closed at their weekly highs. Rallied the whole last week the US markets and gained further to their record territories. After, that massively strong week the Russell turned also in positive territory in YTD.

• Dow 16,924 +88, +0.52% 
• Nasdaq 4,321 +25, +0.58% 
• S&P 500 1,949 +9, +0.44% 
• Russell 2000 1,165 +0.98%

I love to see in the trading forums most of the guys out there are still expecting the big correction and try to catch the short side. The S&P made its 18th record close of this year and its third straight record finish. So these sell runners don’t understand the market at all. This is a brutal bullish market who is the idiot who sells this momentum. Just look at the chart and open your eyes and just buy, as the legendary Livermore said “Never argue with the tape.”

The Russell2000 made 2,7% weekly gain and recovered faster than the other US benchmark indices. Why? Because as we forecasted couple of weeks earlier, the index was pretty undersold and undervalued so was a great bargain hunting opportunity some weeks ago. The worries by now have gone regarding Russell2000. Just remember a while ago most analysts were complaining about the Russell and now it is the best performer US index. The old rule works again, the analysts were wrong and the market was right. That is an old boring statement, but still more than true.

We started to buy the Russell at level of 1,100 and now the small cap index is at 1,165. Our next target is at 1,190 as a key resistance level.

The BFM Assets Team.