RUT Grows a Tail

The RUT had a pretty ugly morning of selling, but recovered nicely in the afternoon to form a 10 point bottoming tail.

Notice on the chart the 760 area where it found support. This was an area of horizontal support all the way back at the March lows.

Yesterday the RUT broke the uptrend (green dotted line), and today on the gap up it almost reached the 30MA (780 area), but fell from there. The bottoming tail "appears" bullish, but we'll have to see what type of follow through it has tomorrow. I've redrawn an upward trendline (solid green line) and I'll we watching carefully to see how we close tomorrow to see which direction the RUT is likely to move.

For the bullish arguement, it seems to be forming an acsending triangle, but for the bear arguement it's still under the 30MA and the trendbreak from yesterday may not played out it's full move yet.

With the continued heavy volatility I would not be surprised to see the RUT move up and down in the 800 to 750 area until the Fed announcement on Tuesday.

RUT Daily Chart