I have noticed that during last month everything were strongly corellated . Currencies vs Stock markets vs commodities. All moves the same direction. Main driver was only Risk On or Risk Off mentality.

It was also in sectors on stock markets as every sector moved up without significant pullbacks or presentation of relative strength or weakness.

But finally I have noticed first signs of divergences. You probably seen strong rally in gold and silver but without significant decline in USD

Also Oil started to correct.

And finally some parts of stock markets looks differently then others.

I would like to point you to Rusell 2000 index (small caps). It starts to show relative weakness to SP500 or Nasdaq indexes. I will watch it more for possible short trade with IWM ETF. Traders could also use inverse ETF with ticker TWM.

This entry was posted on Friday, September 4th, 2009 at 6:32 pm and is filed under ETF analysis, Stock market comment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.