Sunday, May 25, 2014

A Pending Global Boom?

When asked to define the difference between a fundamental analyst and a technical analyst – I usually say (from personal experience) – the fundamental analyst will think they are right and the technical analyst will think the market is right.

Lately many technical analysts have been watching the U.S. Russell 2000 - small-cap index or the clone ETF the IWM - which is the group of stocks that in early March began to trace out a typical A-B-C type correction which so far has been holding at the important 200 day or 40 week simple moving average - important to technical analysts because the Russell 2000 is bellwether for the U.S. domestic economy. Also important is the Dow Jones Transportation Average which this week closed at a new 52-week high powered by the rails and the airlines. So is the domestic sensitive Russell 2000 over-sold or is the domestic / export sensitive Dow Transportation Average over-bought? The answer may be the quiet new 52-week high of the global trade sensitive Guggenheim Shipping ETF (SEA) which is a clone for the Dow Jones Global Shipping Index which measures the stock performance of high dividend-paying companies in the global shipping industry. The market is predicting a global economic boom 

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