RUT Russell 2000 Small Caps Weekly Chart and TZA Inverse 3X ETF Daily Chart

Small caps should fly high as a risk-on trade occurs. Traders seek the higher growth stocks when the all-clear signal sounds for the market bulls. The QE3 trades should result in the weaker dollar, higher euro, higher commodities, higher copper, higher PM's in general, higher gold, and higher small caps.  The RUT chart clearlyshows this move to high growth and more speculative stocks last week.  Price has now placed a matching high with the red lines showing negative divergence and overbot conditions, wanting to see weakness appear moving forward.  The short green lines, however, due to the Draghi and Bernanke bazooka's, are long and strong over the several week, say three-month time frame. Therefore, price will likely want to come back up again after a pull back occurs. The 880 level is key since Keystone's 80/20 rule says 8's lead to 2's, so a close above 880 would open the door to 920.

TZA has been experiencing strong capitulatory type selling over the last month, many traders simply giving up on this dangerous and highly speculative leveraged inverse trading vehicle.  The bulls did some damage last week so price will need to base across this level moving forward, perhaps placing a W stle bottom  Now that the lower Bolinger Band was violated strongly to the downside, a move back up to the middle BB, at a minimum would be projected. The small caps likely want to produce a stutter step over the next couple weeks, down, then back up, then down. The intial downside target for RUT would be either 850, 830 or even 800. An intital upside target for TZA is the middle BB, which is also its 20-day MA, at 15.5-15.8. The market action over the next six weeks should prove quite dramatic. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.