Although I am critical of classical chart patterns for various reasons detailed many times in this blog and I had criticized last year’s call by Peter Brandt for Dow 4,000 solely on technical grounds, I also want to be fair in this blog and mention his excellent call for a (major) top in Russell 2000 he made last Monday. I think the timing of the call could not be more precise but I am still questioning whether this is a major top.
This is the link to the post by Peter Brandt: http://peterlbrandt.com/major-top-completed-today-in-russell-2000-nyse-composite/ on May 14, 2012.
Next is a daily chart of IWM, the iShares Russell 2000 Index ETF:
It may be seen from the chart that the call by Peter Brandt was timely and a drop of about 3.9% has followed since then. However, the index is now oversold with RSI(14) below 25 and a rebound should be expected. In addition, I am not sure this is a major top and an indication for a bear market to come.
Neverthless, for a short-term trading timeframe, the call was excellent and deserves mentioning.
Disclosure: no relevant positions.