February 12th, 2024

Range expansion is occurring universally. Wishing everyone a happy Super Bowl Monday! I’m starting late today after enjoying the Super Bowl festivities last night. Upon reviewing the charts, I’m noticing an evident range expansion in all areas. The RTY, in particular, is making strides through some resistance as the daily Bollinger bands broaden – a series of events we haven’t witnessed in the RTY since last year’s end. These charts suggest that ongoing progress is being made in RTY, even though it remains within the late December range. However, with momentum on the bull’s side, I wouldn’t advise against this move.

ES and NQ continue to exhibit bullish tendencies with no signs of stopping. With widening Bollinger Bands, ES appears more bullish than NQ, suggesting the possibility of prolonged growth. While NQ demonstrates bullish attributes, a possible stall around 18,336 and subsequent pullback wouldn’t surprise me. That’s a daily Bollinger band peak that I suspect will create resistance.

The 10-year yield is also experiencing range expansion as rates escalate to their highest levels this year. If asked to predict the behavior of RTY given the resurgence of 10-year rates, I’d surmise we’d be experiencing the year’s lows. It’s perplexing to see RTY dismissing the increasing rates, but in a world that often defies logic, it’s best to go with the flow. If it begins to matter, we’ll take note.

For now, with the markets exhibiting strong bullish trends and low volume and volatility, this market seems favorable for employing a short-term strategy to buy the dip, and stay away from selling rallies. The crucial advice here is not to overtrade in this market. That is a surefire path to financial ruin.

Cheers, DELI