Could Russell 2000 be looking to break down & tag 204 Month SMA?Could Russell 2000 be looking to break down & tag 204 Month SMA?
Russell2000
Russell 2000: Buy opportunity on 1D.The index has bounced this week off the 1,458.00 Support which was the contact point on October - November 2018. This is a cyclical buy opportunity on 1D and an early long signal as 1D is still neutral (RSI = 44.642, ADX = 33.294, Highs/Lows = 0.0000). We are long on RTY targeting 1,590 (Resistance). If this bullish sequence later holds the 1,498.80 - 1,514.20 zone as a Support, we may be looking at the start of a strong bull run to the ATH and beyond.
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Russle 2000 ShortAlthough I strongly discourage the action of shorting in my personal strategy this doesn't keep me from speculating on the possible price fluctuation of the index. Viewing recent recessionary signals such as the inverted yield curve, raising tensions in the US-China relation as well as US-Mexican relations I've come to the conclusion that there might be something sketchy going on in the markets. Also noting the decision of Neil Woodford to close withdrawals from his fund I've come to the conclusion that there is rising anxiety for investors on the future of stock prices. If this sentiment continues we could see perhaps lower lows than those seen during the December period. I personally believe the recent market rally was driven merely by the good news caused by the increased sales of the holidays and other factors as well, but now entering to one of the usually most negatives stages of the year the fragility of the market could again be exposed.
Additionally, from a technical point of view, we can observe a MACD cross over on the weekly chart. This indicates that the short-term average of price fluctuation is moving lower than the longer 26-period average, therefore, indicating a possible future change in the longer-term average and therefore moving the price lower. Also were positioned in a support level which may be tested and stand strong but with further downward pressure it could easily push through in the near future leading to a strong move to the downside.
Although I don't recommend a strategy based on buy and sell signals I feel the there is a high amount of bearish signals being triggered, not only in the chart but in the news as well as in economic data such as the Yield curve inversion. The low level of unemployment also signals me we're if not at then near full employment which could lead to higher wages and therefore layoffs (this is mear speculation and not based on any fundamental truth).
This analysis remains exactly the same on multiple other indexes such as the SPX, DJIA, and ME (although I belive the ME to be a way more riskier investment given the political situation of Mexico)
My recommendations would be:
1) Play it safe, don't short
2) Have your money on a safe haven such as gold or keep your money liquid
3) Buy once the market has had a significant drop such as the December lows and lower
4) Brace for impact
Russell 2000 IndexRussell 2000 Index Negative Divergence & possible death cross indicating potential selloff ...!
Elliott Wave View: Russell Should Extend LowerElliott Wave sequence in Russell (RTY_F) from May 6, 2019 high (1621.9) appears incomplete favoring further downside. The bounce to 1571.5 in the Index ended wave X. Index has extended lower in wave Y and broken below the previous low on May 14 low (1516.7). This suggests the next leg lower has started. The internal of wave Y is unfolding as a double three Elliott Wave structure. Down from 1571.5, wave ((w)) ended at 1492.9 as a zigzag Elliott Wave structure where wave (a) ended at 1522.1, wave (b) ended at 1548.9, and wave (c) ended at 1492.9.
Wave ((x)) bounce is now complete at 1523.90 peak while below there should extend lower. We don’t like buying the Index, and as far as pivot at May 16 high (1571.44) stays intact, expect Index to move lower. Potential target to the downside is 1441.85 – 1466.32 area where cycle from May 6, 2019 peak reaches 100% extension.
SPX 600 points lower by August Rising Wedge trend linesBounce above 2900.. Could be a hundred point higher than here today..So enjoy the rally to accumulate short around these levels. Any time higher is a gift.
All time high fractionally??? or just Oct 2018 high
Global slowdown contagion hitting our shores..
Rates cut sooner than the fall to fan the fire before its out
The market didn't read this one soon enough. Job Cuts.Guiding Lower.
Recession Stock Time
Trade Safe
AMEX:SPY
The Russell 2000 Finally Breaks Out!Since the turn of the New Year, bears have been calling for an end to this unstoppable rally. Everyone, including myself, seemingly wanted to short a bounce in the market and we all got crushed. Can you blame us? Volatility often begets volatility and it seemed that a recession was right on time with the current bull market's length reaching record territory. A recession, however, was not in the cards and the market went on to form a perfect V-bottom. With the S&P at all-time highs, the only hope of the bears was that the small and mid-cap stocks were lagging the pack and signaled devastation to come. This, however, seems not to be the case anymore with the Russell 2000 breaking the 1590 level today.
With a Fed that seems hellbent on overstimulating the economy, an administration that feels it needs a higher stock market to be re-elected, a majority of economists calling for a recession and a ton of money on the sidelines or in bonds after December's crash, I believe conditions are ripe for a melt-up over the next year. The chart above shows an inverse head-and-shoulders (also on the S&P) that, if it were to play out classically, would target 1913 in the Russell! That's 20% higher than here!
Putting my long-term view aside (as I am mostly a short-term trader), I believe we can play this breakout in the Russell for a short-term, low-risk, high-reward trade.
Buy the Russell (via IWM, or RTY E-mini's) @ 1604 or lower
Target 1: 1649
Target 2: 1700
Stop: 1583
RTY1!, Small Caps in the Breakout ModeA strong bullish daily candle confirms the breakout of the significant resistance level. The small caps entered a balance breakout mode. Usually, that would lead to continuation pattern until the projected area top is not reached. The bullish pattern would help the S&P to move higher or at least to remain at the current prices. The small caps offer better upside reward. If you don’t trade futures you can trade IWM ETF instead.
05/03/2019
RTY1!, Small Caps Broke the BalanceIt seems the upside idea started to unfold. With a low volume there is no strong upside move, nevertheless , a breakout remains intact so far. The market can grind up being in the breakout mode for awhile. Traders are advised to buy pullbacks until the breakout is intact.
The strength in the Russell helped the S&P, which was expected and outlined in the previous post.
04/30/2019
Russell is likely to follow SPX After December selloff, SPX is at all time highs where Russell is clearly lagging. I think the reason is that after panic investors are now biased to buy big company stocks rather than small and risky ones. I think Russell will catch up with SPX if (!) this performance in SPX will continue.
RTY1!, Keep Knocking its Major ResistanceThe Russell 2000, a true indicator of the broader market strength, is keep testing its major resistance. The original idea that it could offer a better upside reward is still intact. Usually, a support or resistance eventually gives up after multiple testes.
In case of the successful breakout the released energy would propel the market - there will be a lot of chasers who is watching it and wait for confirmation. It would also help the S&P 500 to move higher or at least to remain at the higher prices.
In case of a false breakout, things could turn ugly for the buyers.
Watch the index for a great opportunity unfold. If you don't trade futures look at the IWM ETF.
04/28/2019
A 5 wave impulse is complete in the Russell 2000A complete 5 wave impluse is complete. Both corrections retracing exactly 50%, and a 61.8% retracement off the 5th wave high.
RTY1!, All Eyes on Small CapsHere is a dissected daily chart of Russell 2000 futures with important levels to watch. As of today, the index remains the weakest among the others. Last week it tested an important trend line but managed to close above it. The index has an interesting behavior that could be used to trader's advantage. For example, it may be in a catch up mode and trend well while the rest of the indices are aimlessly chopping or it may show a hint where the rest of the indices will be heading.
Say, as an investor where do I put my money to work if I can see the Nasdaq and S&P 500 are at all time highs? The Russell is far from the all time highs and has plenty of upside potential.
I drew a few projected areas above and beyond the current action. In case the prices break above that would be a nice upside trend to fill the projected area. In case of a breakdown of the trend line the price can fill the existing area and still find enough buyers to remain inside.
Let's watch the price development next week. Being close to the upper edge of the existing balance the upside potential is there. The only warning sign is a notable negative divergence.
04/21/2019
Complex Inverse Head & Shoulders on the IWM. Could move higher.IWM is currently with a complex inverse head and shoulders pattern, and we are now sitting just below the neckline. It is trading above the 50/100/200 day moving averages, and it looks like a golden cross (50 MA crossing the 200 MA) may occur soon as well. Setup looks good, but it needs to break above the flat line of resistance around $158.60 to get moving. I would either like to see a strong break-out into a strong rally higher, or to see a break-out above the neckline into a pull-back to retest the neckline as new support, ideally confirming the S/R flip before further consolidating and then moving higher. I am watching $164.20, $170.00, and $173.50 as possible resistance area's based on previous price action.
Moving average guide (All daily for this post):
50 day moving average in Green.
100 day moving average in Yellow.
200 day moving average in Red.
-This is not financial advice. Always do your own research and own due-diligence before investing and trading, as for investing and trading comes with high amounts of risk. I am not liable for any incurred losses or financial distress.
High Probability Intraday Setup for E-MINI RUSSELL 2000 futuresThe following are trades setup ideas in 15 mins chart for E-MINI RUSSELL 2000 futures
There are 2 distinctive dotted lines labeled as (provided by www.decisivealpha.com )
1. AI's Intraday Resistance
2. AI's Intraday Support
These 2 Support and Resistance signal lines are generated by machine learning AI robots as a high probability trade setup for long or short.
[b ]Long Setup
If price action closed above the Pivot Point Line
AND demonstrate bullish sentiment strength by closing above the AI's Intraday Resistance line, the idea is to long and take profit at Pivot Point R1/R2 price region.
Depending on trader's positioning sizing, partial profit could be taken at Pivot Point R1. The remaining position could be utilized to ride the intraday bull sentiment should it continues to approach Pivot Point R2 profit target.
Instead of relying on 100% discretionary (human) trading, the robots will provide trade execution plan and it is entirely up to the human trader's decision to follow.
This is highly recommended to trade during Europe and US market hours for liquidity and volume for this product.
www.decisivealpha.com
Russell 2000: No man's land at the moment.RUT is practically neutral at the moment as the 1D Channel Down (RSI = 46.549, Highs/Lows = -4.0275, B/BP = -30.2779) keeps the index bearish while 1W (excluding the early Dec - late Jan extreme) supports it (RSI= 49.965, Highs/Lows = 12.4371) from a greater fall. So far Russell is a no-action asset but we are willing to go long on the upward break-out of the 1D Channel Down. TP = 1,600 and 1,620 in extension.
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Tracking 1480-1475 in Russell..From the previous idea (see attached: "Russel leading the consolidation pack") you will know that Russell in many ways has been acting as a leading indicator for US Equities.
This is interesting timingwise, especially when the break to new highs in S&P and NQ occurred was not comparable in Russell. So here we are now only needing to track the 1480-1475 region. This is the 38.2% retrace and we 'know' in advance is the level bulls would want to turn for continuation.
Should we break lower then it will really knock confidence and imply we are starting to show early signs of an impulsive selloff. This will also bring into question the more meaningful top.
Tracking it very closely with Mueller cleared...Best of luck all and thanks for the support!
The Russell 2000 Index (RUT) Sends Out Bearish Signal, Crash...The Russell 2000 Index, which tends to move before the S&P 500 Index (SPX) has broken below support with strength.
On the chart above we can see that the RUT broke through EMA50 and EMA100 like hot butter. This can lead to a retrace as far down as 0.618 Fib. just to start, it can go lower.
The MACD is entering the bearish zone with plenty of room left for more down.
The RSI is also looking extremely bearish.
If this index is an indication of how the conventional markets will move then prepare for some strong bearish action in the weeks ahead.
This quick analysis is shared as a follow up to my SPX analysis here:
This is just a friendly reminder.
Thanks a lot for reading and your continued support.
Remember to hit like.
Namaste.
The Russell 2000 Index (RUT) Sends Out Bearish Signal, Crash...The Russell 2000 Index, which tends to move before the S&P 500 Index (SPX) has broken below support with strength.
On the chart above we can see that the RUT broke through EMA50 and EMA100 like hot butter. This can lead to a retrace as far down as 0.618 Fib. just to start, it can go lower.
The MACD is entering the bearish zone with plenty of room left for more down.
The RSI is also looking extremely bearish.
If this index is an indication of how the conventional markets will move then prepare for some strong bearish action in the weeks ahead.
This quick analysis is shared as a follow up to my SPX analysis here:
This is just a friendly reminder.
Thanks a lot for reading and your continued support.
Remember to hit like.
Namaste.
$RUT $SPY Small Caps? - Loosing Steam or Taking a Breather?Small cap equities have had a fantastic run since the beginning of 2019, so much so that the asset class is up 12.72% year-to-date. However, the asset class has been loosing a little bit of luster as of late, especially in relation to their large cap counterparts.
Since mid-February 2019, the price ratio between small cap and large cap equities (RUT/SPY as a proxy) hit its 200-day moving average and failed to breakthrough, and in turn, has been falling since. In addition, its Smart Money Indicator reading shows it is 1.84, well of its highs of 1.98 as seen earlier in the year, indicating that this trend has some legs to stand on.
Thus, this lends credence to the fact that global investors have been rotating out of small cap stocks and into large cap stocks.
We believe that this trend is due to two reasons:
1) Improving Trade Deal Prospects Between the US and China - As talks of a trade deal continue to progress well between the two nations, investors have begun to move money back into large cap sectors and names that will greatly benefit from the reduction, or even removal, of trade barriers between the US and China. This can been in the fact that trade sensitive sectors such as technology (up 16.67%) and industrials (14.44%) have been some of the top performing sectors year to date.
2) Slowing Global Economy - With the current economic expansion growing tired and weary, from a factor perspective, investors have been moving money out of riskier segments of the equity market and into “safer” areas such as large cap stocks, companies with stable earnings growth, value stocks, and firms with lower betas in relation to the general market. Investors have realized, and rightfully so, that though this recent run in the markets has been solid, the macroeconomic backdrop continues to be an area of concern.
Overall, though we think that small caps still have some to run, investors should take heed over the fact that money is moving out of this segment of the equity market and into large cap equities. Furthermore investors should be cautious if this trend continues.
