Damocles Diamond

The most promising pattern going these days is the /RTY (small-cap futures) which I am watching with rapt attention.

Of course, I’ve been down this road recently. The semiconductors, symbol SMH, were going the same way, and then out of the blue (or more likely out of the Eccles Building), BANG, the pattern was absolutely and totally ruined. It was bad enough that a psychologist has to visit me each day with a soft puppet and ask me to point out where it was that Jerome touched me.

Hope springs eternal in the bearish breast, however. Here is the idealized scenario for the small caps.

Should this transpire, you can expect another $5 trillion in free corporate handouts from the Fed, as well as $2 trillion in a fund which anyone to whom the police have been unkind can extract up to $10 million per person if they sign a form.

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