RUT: Rising Wedge Broken

The RUT Broke down to close below the 8MA, 20MA and 50MA. It also closed below the upward trendline confirming the break of the rising wedge. The uptrend is still holding up technically on the daily chart, BUT it will need to hold above 460 this week in order to retain the higher low.

Here are a couple observations of the daily chart:

- After the huge 3 month move down in Sept, Oct, Nov, it was technically probable that it would retrace at least 38.2% (520), if not 50.0% (567). So far it has retraced 38.2%

- Since the RUT is in an intermediate downtrend, a bear flag formation is/was probable. Now it appears to be breaking down.

- The average trend is 3 to 5 legs, this 6+ week rally has had 4 legs so far.

- The last bear flag in Oct preceded a 180 point drop to the 370 area.

- If the current bear flag produces a similar 180 point drop the target would be 350.

- The intermediate trend is still down.

RUT Daily Chart: