RUT: Head and Shoulders?

The RUT formed a LOWER LOW on the daily charts that is bearish no matter which way you slice it. The 440 first target of the broken rising wedge was hit in just 4 days.

The short term uptrend was broken, and in the context of an intermediate downtrend the next little rally is likely to form a lower high which will then create a Head and Shoulders pattern.

The possibility still exist for the market to fall straight down from here too, so all those options are on the table now. We'll just wait to see if 460 can hold tomorrow for starters. The upside target for an "Obama Rally" would be 490. The 440 area would be the first target to the downside.

We are now able to draw our neckline and downside targets IF the H&S Pattern plays out.

RUT Daily Chart: