RUT: Another Positive Day

The RUT finished up in positive territory today at 720.26 and so far seems to be hinting at the possibility of a short term rally next week to retest the recent highs in the 740 area (if it has enough mojo).

The evidence of this potential strong bounce off of 700 on Thursday and todays higher close above yesterday. While there is lots of nervousness about Lehman and AIG, chances are that someone will pull a rabbit out of the hat this weekend to sooth the markets fears. Once soothed, the bulltards are likely to buy with reckless abandon and we get to experience another emotional rally. That's were my head is at this Friday, but I am going into the weekend with negative Delta since it's a lot easier to control the upside then the downside. If the rabbit doesn't appear it could be an emotional sell off to the other side. (All of that above is just worthless opinion).

The charts are showing a neutral to slightly upward bias for next week, but there is some overhead resistance at 730 and 740 that it will have to break above and hold before the short term (6-8 week) downward bias is erased.

Beware, as there is still a long way for the RUT to fall on nasty news.

RUT Daily Chart: