RUT and The Tale of Failed Bottoming Tail Candles

Looking at the RUT chart today I was amazed to find that the last 6 bottoming tail candles on the daily chart all failed. This is not to say that the bottoming tail the RUT formed today will fail, but be aware that to confirm a bottoming tail candle, the following day's body must close above the body of the bottoming tail candle.

(A bottoming tail candle could be defined as a candle with a long bottom shadow that is at least 3 times the length of the body.)

Overall the RUT has been very choppy with the Real Estate Sector volatility adding to the vulnerability of the small caps. The RUT intermediate trend is still down with lower highs and lower lows over the last 9 weeks.

The RUT is attempting to rally, but hit resistance at the 50% fib where it also intersected with the descending trendline.

We'll be watching to see if the RUT can finally confirm a short term reversal which would help to form a higher low. If we close lower tomorrow it will create a better case for the bears and may hint to a retest of the 735 lows.

RUT Daily Chart: