In my last October article about the Russel Index (1), I pointed out that looking at the last two years charts of Russell sub Sectors, in the last month the strongest one in terms of Relative strength was the Russell Industrial Materials & Processes. From the following chart we can see that Relative Strength ratio, at the end of August, anticipated (a) the breakout of the trading range price channel (b) begun in late 2016, and until now the situation hasn’t changed.

The U.S. Dollar has concluded last week a long bottoming process after confirming an interesting reversal pattern. In the chart of the Dollar Index (Figure 1) a so called inverse head-and-shoulders is visible, a technical pattern that anticipates a possible reversal of the negative trend that culminated with the 32 months low of last September at 91. After then, a progression of growing lows has reached, and exceeded last week, the key resistance of the pattern described (94.25).

For many years in the last two decades the Japanese equity market has been taken as a textbook case of secular bear market. Since the historical high of 1989 the Nikkei 225 stock index of Japan has been subdued by a prolonged downtrend that hit its lowest low in 2009 after losing about 80% from the high. Intermediate rallies had developed meanwhile, some of them were consistent, like the four years recovery started in 2003, but the although considerable +130% that followed did not reverse the secular trend that prevailed again thereafter whit a new deep fall.

Following their retracement down during the Spring, China and Industrial metals have been moving up since May. Oil has followed with a lag, and from late June, it has been rallying strongly. Again, following China and Industrial Metals by a few weeks, oil topped out late September. We believe that this is an intermediate top and that from November, at the latest, it should resume up towards year-end.

This summer I wrote an article about the suggestion of stalking the small cap stocks Russel 2000 Index (1). Just like a cat stalks its prey looking for the best possible moment to pounce, so a trader can stalk an entry to get the best price for entry.

The reason was because on this Index it is present a not so common pattern: the “orthodox broadening formation” (2). This kind of pattern was present also on the Dow Jones Industrial Index, but it was luckily negated (3).

Last week we had a potential and positive sign that also on this Index the pattern could be negated. We have several signs of strength, but we are still in the early stages of potential medium-term growth.

In January, I wrote an article about the situation of the Stoxx 600 Index, indicating that it had a good strength and that some pattern studies suggested that the Index could lead to a probable formation of a higher low before to start a new uptrend leg (1). In reality the retracement begun later: the bullish short term trend easily crossed the down trend line (b), the resistance level of the previous 2015 high, situated at Fibonacci level of 23,6% (a), and topped in May with an higher high (H1). Then we had a retracement that apparently stopped at the 38.2% Fibonacci level, forming the aforementioned higher low (L1). The oscillator also turned upward after touching the zero line (c).

Crude Oil is showing an interesting technical pattern. The rally that has developed in the first half of September has now exceeded the 200 days moving average. Furthermore the WTI is now testing the not less important trendline that joins the 2014 top with the decreasing highs of the first half of this year. This movement is part of an accumulation that had begun form the lows of 2016 and gained strength on the progressively rising lows of the last 12 months.

At the end of 2016 (1), I wrote an article about the STOXX Supersector Europe 600 Health Care Index, pointing out that there were technical signs of a possible recovery. I indicated that the Index in July 2016 reached an important high at about 780, and I suggested that this was the level to overcome to have the first confirmation that the healthcare European equity market had regained its strength.