Short the RUT forever? Maybe not.Our account is showing a good profit after shorting the Russell 2000 index at 2:00 Thursday afternoon and again at the same time on Friday. Validating our view, the R2K cratered in the last two hours of both days' sessions.
To expect Two O'Clock Charlie to deliver such a bomb every day from now on would, of course, be ridiculous. This chart shows two technical signs of a likely near-term snap back:
The index is lurking at the bottom of a one-month trend channel on the 4-hour Heikin-Ashi.
The index is extended from the 50-period moving average.
Don't get us wrong. If the RUT looks to get hammered Monday afternoon, we'll be sellers. But if it doesn't, we'll be offsetting contracts to take our profits, and ready to watch for fresh sell signals as the RUT reverts to the trend median (or farther) and the 50MA.
