Small & Microcap Equity Sector Preview - January 30th, 2017

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Mark Putrino, CMT www.bullsheadtrading.com [email protected]

BHT identifies meaningful trends and important supply and demand levels in the financial markets. An understanding of these dynamics will add

Alpha to any investment strategy. The following are important factors to consider in the Small & Microcap Equity Sectors:

Russell 2000 - After making all-time highs last month, the IWMs continue to trade sideways. In the short-term, $135 has been support but it may be deteriorating. Longer-

term, there may be support around the $129-130 level because this was the top and an all-time high in June of 2015.

Russell 2000 Value - The move that the IWNs made in the month after the election is one of the largest gains ever made in that timeframe. Short-term, they are trading

sideways. Longer-term, the $105 level may be an important support level because it was important resistance three times over the past four years.

Russell 2000 Growth – The IWOs are consolidating. Unlike the other two indices, they did not make a new all-time high in the recent rally. There is resistance around the

$160 level because this was the peak and an all-time high in June of 2015. On the downside, there will probably be support around $150 because it was resistance in August,

September, and October.

Russell Microcap – The IWCs rallied off of and continue to test support around the $84.50 level after breaking their short-term downtrend. This level is important support

because it was the peak and an all-time high in June of 2015. Longer-term, a break of this level could lead to a meaningful move lower.

S&P Smallcap 600 – The IJRs have broken their short-term downtrend and are consolidating. Longer-term, there will probably be support around the $63 level because it was

the top of the range from August through early October.

S&P Smallcap 600 Growth - The IJTs continue to consolidate around the $150 level. Longer-term, if they go lower there will probably be support around $140 because it

was the top in August & September.

S&P Smallcap 600 Value - The IJSs have broken their short-term downtrend and are consolidating. Longer-term, if they go lower there may be support around the $125 level

because it was resistance from early July through early October.

Russell 2000 Consumer Staples – This sector broke support around the 2,520 level and continues to trend lower. There was support around 2,520 because it was resistance in

September, October, and November.

Russell 2000 Utilities – This sector is has broken the uptrend that began in early November and is now consolidating after hitting resistance around the 1,745 level. This level

was resistance in July so it isn’t a surprise that it is resistance now as well.

Smallcap Equity Momentum – The Russell 2000 Relative Strength Equity Momentum Indicator is neutral.

Small and Microcap Equity Sector Levels & Trends Preview

Analysis of Supply & Demand Dynamics in the Financial Markets

January 30th, 2017

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Russell 2000 - After making all-time highs last month, the IWMs continue to trade sideways. In the short-term, $135 has been support but it may be

deteriorating. Longer-term, there may be support around the $129-130 level because this was the top and an all-time high in June of 2015.

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Russell 2000 Short-term - After making all-time highs last month, the IWMs continue to trade sideways. In the short-term, $135 has been support

but it may be deteriorating. Longer-term, there may be support around the $129-130 level because this was the top and an all-time high in June of

2015.

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Russell 2000 Value - The move that the IWNs made in the month after the election is one of the largest gains ever made in that timeframe. It rivals

the move made off of the bottom in March of 2009. In the short-term they are trading sideways. Longer-term, the $105 level may be an important

support level because it was important resistance three times over the past four years.

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Russell 2000 Value Short-term - The move that IWNs made in the month after the election is one of the largest gains ever made in that timeframe.

In the short-term they are trading sideways. Longer-term, the $105 level may be an important support level because it was important resistance three

times over the past four years.

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Russell 2000 Growth – The IWOs are consolidating. Unlike the other two indices, they did not make a new all-time high in the recent rally. There is

resistance around the $160 level because this was the peak and an all-time high in June of 2015. If they head lower there will probably be support

around $150 because it was resistance in August, September, and October.

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Russell 2000 Growth Short-term - The IWOs are consolidating. Unlike the other two indices, they did not make a new all-time high in the recent

rally. There is resistance around the $160 level because this was the peak and an all-time high in June of 2015. On the downside, if they head lower

there will probably be support around $150 because it was resistance in August, September, and October.

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Russell Microcap – The IWCs rallied off of support around the $84.50 level. This level is important support because it was the peak and an all-time

high in June of 2015. A break of this level could lead to a meaningful move lower.

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Russell Microcap Short-term – The IWCs rallied off of and continue to test support around the $84.50 level. This level is important support

because it was the peak and an all-time high in June of 2015. A break of this level could lead to a meaningful move lower.

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S&P Smallcap 600 – The IJRs have broken their short-term downtrend and are consolidating. Longer-term, there will probably be support around

the $63 level because it was the top of the range from August through early October.

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S&P Smallcap 600 Growth - The IJTs continue to consolidate around the $150 level. Longer-term, if they go lower there will probably be support

around $140 because it was the top in August & September.

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S&P Smallcap 600 Value - The IJSs have broken their short-term downtrend and are consolidating. Longer-term, if they go lower there may be

support around the $125 level because it was resistance from early July through early October.

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Russell 2000 Consumer Staples – This sector broke support around the 2,520 level and continues to trend lower. There was support around 2,520

because it was resistance in September, October, and November.

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Russell 2000 Utilities – This sector has broken the uptrend that began in early November and is consolidating after hitting resistance around the

1,745 level. This level was resistance in July so it isn’t a surprise that it is resistance now as well.

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Smallcap Equity Momentum – The Russell 2000 Relative Strength Momentum Indicator is neutral. This means that it unlikely that there will be a

significant move over the next few days assuming nothing out of the ordinary happens.

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Summary:

In financial markets, there are certain price levels that are more significant than others with regards to the amount of supply and

demand that exists at them.

In financial markets, prices are always doing one of three things. They are either going up, going down, or staying the same.

BHT utilizes a process and methodology that has been developed over twenty years to identify these levels and price trends.

BHT does not utilize many of the traditional Technical Analysis Techniques such as Fibonacci Retracements or Elliot Waves.

BHT questions and doubts the validity of many of these techniques and believes they are in the realm of Bigfoot and UFOs.

The BHT philosophy and method is based on experience, common sense, and logic. The founder spent almost two decades trading

very illiquid securities and this background gave him the ability to understand how to identify these levels and price trends.

An understanding and awareness of these levels and trends will add Alpha to almost any investment strategy.

BHT’s goal is to contribute to and enhance your investment process.

Bulls Head Trading Analysis, LLC was founded by Mark Putrino, CMT.

Mark has nearly two decades of experience in the institutional investment management industry as a professional securities trader. Before founding

Bulls Head, he spent more than 15 years as the Head Trader at three different institutional hedge fund and money management groups, all of which

exceed or exceeded more than $1 billion dollars in managed assets. His experience also includes trading directly for two of the best money

managers in the history of the industry, Mario Gabelli and Steven A. Cohen.

Mark is a member of the Market Technicians Association and has held the Chartered Market's Technician Certification (CMT) since 2002. He

earned a Master’s Degree in Finance at New York University, and a Bachelors in Economics at the University of Connecticut

Small & Microcap Equity Sector Preview - January 30th, 2017

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