RUT Daily Chart: Head Above Downtrend

The RUT closed at 453.76 with enough candle body to poke it's head above the downtrend line on the daily chart. In theory this is bullish, but it also smacked the downtrending 20MA earlier in the day that created quick a smack down during lunch.

At this point we have an uptrending 8MA and a downtrending 20MA with the price trapped between the two, WAY above at 660 we have the downtrending 200MA. Technically the 200MA is an upside target, we'll just have to see how difficult of a task it is for the RUT price to rally in the current economic environment. It's very important to remember that price action never has to make sense, but we must trade the price action and not what we think will or should happen.

The RUT has only spent 3 days above the 20MA since October, and that was just before the huge leg down in November. This may or may not be the place were prices rally under the guise of a "Santa Claus" rally and everybody "buys in" because they feel everyone else is doing it. If this happens and prices can trend up to the 550 level it should create a good short set up in that area.

I continue to keep a bearish bias overall, but I am currently bullish short term on the daily charts. Right now, the 440 level will need to hold in order for me to remain bullish.