On the daily chart it blew right through the 30MA and 100MA with the next MA resistance level being the 200MA at 731. There should be some overhead resistance at 720 too, but now that the rallies begun there may be some more bulltard buying before a pull back develops.
In the last 8 months, the RUT has spent only 2 days above the 200MA so this may be some strong resistance. The RUT has essentially spend the last 6 days going straight up with the exception of a consolidation day that only pulled back a few points.
Keep in mind that this move straight up will have little support in the future should the RUT decide to fall again. The RUT sometimes reminds me an undisciplined runner who sprints the first 5 miles of a 26 mile marathon and then falls down after mile 7. Big moves up met with big moves down.
Pulling out to our longer time frames lets remember that we are in a long-term downtrend with a confirmed lower high and we just put in an equal to slightly higher low. Only if the RUT can somehow put in a new high over 770 would we change our bias from the L-T downtrend.
Short term trend is up, overhead resistance ahead but keep your eyes on the fib levels, if it closes above 61.8% (720) then the next upside target is 740 and 760 after that.
RUT Daily Chart:
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1 comment:
Thanks for your chart and comments: "Short term trend is up, overhead resistance ahead but keep your eyes on the fib levels, if it closes above 61.8% (720) then the next upside target is 740 and 760 after that."
The Russell 2000, flew 2.5% through resistance at 70 to close at 71.47.
This is just short of 72.50 -- a pivotal point for the Russell 2000 that goes back to October 2, 2006, where a broadening top pattern formed. Street Authority relates: "When you see a broadeing top, the market will eventually drop".
Said in a conservative way: the Russell 2000 at 72.50 is now at strong support; that which was once strong support will now be resistance.
Said in a contemporary and more fitting way: now that the Russell 2000, $RUT, has once again risen up to the apex of its broadening top pattern, it will once again fall.
We live in a time of awesome financial waves. The wave that is coming immediately is going to literally sweep these small US based companies off the map as they are highly dependent upon a dysfunctional and broken credit and lending system.
I recommend that one go short the markets via Proshares 200% bear market ETFs which were oversold as seen in the following percentage losses for the last five days:
SKF Financial -30%
SRS Real Estate -20%
SJF Russell 1000 Value -16%
FXP China -16%
SCC Consumer Services -13%
Google Comparative Chart
DXD Dow 30 -12%
TLL Telecommunications -7%
RXD Health Care -3%
SSG Semiconductors +2%
TBT US Treasuries +3%
Or even better yet, dollar cost average buy gold during its current dip as it really is in an Elliott Wave 3 up breakout.
My investment maxim is: "In a bull market be a bull; in a bear market be a bear. In a bull market, one buys on dips; in a bear market, one sells into strength".
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