TA Strategy

Using technical analysis gave us a pretty good indicator for small caps to outperform this month. IWM outperformed relative to SPY immediately after the November election. But, small caps under-performed since the beginning of the year giving back all of the out-performance until the end of August. This is when IWM/SPY saw the .618 Fibonacci retracement coincide with the Nov election low in the pair. After holding this key support level we have seen IWM gain 10.5% compared to the 3.5% gain in SPY. Now we face short term resistance at the .618 retrace from the year high in the pair. Updates daily in the morning newsletter at www.keystonecharts.net