Technically this chart is dying to retest the 720 area, and unless a miracle bull angel appears Friday morning, tomorrow is likely the day. I generally don't like to predict direction at all, but the 720 area is also intersecting with the 200MA which can act as a very strong magnet.
Keep your eyes on that 720 area too, as it "should" have some strong support there, but just as we have seen with resistance not holding the RUT back on it's climb the last month, the support can just as easily be ignored.
In summary, be prepared for anything as the RUT is a very loose cannon these days.
RUT Daily Chart:
Note that on the weekly chart it has started for form a bearish engulfing pattern at resistance.
RUT Weekly Chart:
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The Russell 2000 shares, IWM, and especially the Russell 2000 value shares, IWN, have benefitted the most of all indices and sectors, with exception of the homebuilding stocks and biotechnology stocks, from the yen carry traders going long the US Dollar and buying the financial stocks beginning July 14, 2008, after they took profits on selling oil, USO.
The Russell 2000 stocks are small US based American companies highly influenced by the financial sector; they got "goosed up" by the rally in the financial sector.
They will now fall like a rock and manifest their traditional volatility as the finanical sector fails, greatly rewarding those who go short at this time.
Trading at 72 for the RUT is a significant number; it's the middle of a 'broadening top pattern' that goes back February 27, 2006. It's as Street Authority relates "when you see the broadening top, the market will eventually drop".
The Dow got knocked out of its ascending wedge by AIG's need to recapitalize and likely downgrade by rating agencies.
Given all this bearish development, I recommend that one most definitely go long SKF and possibly short FXP and EEV.
I also recommend that one be invested in gold at BullionVault and GoldMoney.
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