Tuesday, December 10, 2013

Momentum Becomes Elusive...12.10.13

Yesterday we looked at the VEGA bullish model profile and today here's the current view of the Small World portfolio.  Both are characterized by waning momentum and today's decline in many of the tech big names (not to be confused with the internet big names) is a cause for some concern although volume continues to be muted so the bulls may yet regain the lead.
The best looking profile here is probably EWJ (Japan), sharing a low put/call ratio with VGK but enhanced by a number of market forecasters today who predicted that Japan's economy is poised to kick into high gear next year.  The same forecasters predicted that the European markets would do well (VGK), although to a lesser degree and with more risk factors to deal with.

Note the general decline in volume today (volume buzz column)....as well as the positive gain in EWJ (and EEM..emerging markets, which has been trying to get in  breakout mode lately, but which has delivered mostly stop and go momentum with no clear trend defined ).

Small World has booked some nice gains recently but the STOP line is dead on the trend line intersection so cash will be our position if equity weakness develops tomorrow.