In early October, I pointed out that the Russell 2000 (IWM or $RUT) could be forming a bullish butterfly pattern, having found buyers off of the 20month SMA. (See here)
Well so far so good and I'm calling it's recent consolidation a bull "flag" due to no significant breakdown in the other three indexes, nor semiconductors.
Friday we saw banks and broker/dealers make a nice reversal higher after comments were made, that while the ECB is not easing "now", they will be preparing a QE plan for their January meeting. The U.S. 10 year popped and the banks/brokers followed in suit.
Small caps also typically outperform large caps going into the end of the year. While the stronger US dollar may weigh on them longer term, I still believe Santa…