Bearish CypherAppears the 4th leg terminated right below the .786.
No recommendation.
Crooked W.
Valley 2 is lower than valley 1.
The 2nd leg, AB is the retracement leg and it pulled up to just above the .5 fib level, which is between the .382 and the .618 and adheres to the Cypher's rules.
The 4th leg appears to have completed very close to the .786.
The Cypher is measured from point X to point C to calculate the final leg.
There is a bullish version of the Cypher as well.
US2000 trade ideas
Jamie Gun2Head Trade - Selling US2000Trade Idea: Selling US2000
Reasoning: Looking for selloff to extend - targeting 61.8% fib level
Entry Level: 1989.0
Take Profit Level: 13512.0
Stop Loss: 1953.0
Risk/Reward: 2.77:1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Russell 2000 Has Finished Minor Wave WIt appears that the Russell 2000 and all of the major U.S. stock indices have finished minor wave W. We should now begin minor wave X.
It is worth noting that it is also possible to count all of the wave degrees from the June 16 low as one degree higher, and instead of beginning wave X, we could be beginning the major decline. In this case, minor wave W would simply be the completion of minor wave C (currently minute wave C). All major indices have hit sufficient Fibonacci retracement levels, making this a possibility. However, I believe this outcome is less likely because intermediate wave 1 took the forming of a leading diagonal, and the most common retracement level for wave 2 following a leading diagonal is the 0.786 Fibonacci level. I'm not saying that the market will retrace a full 79% before beginning the major decline, but I do think it is probable that it will at least retrace 62%, and we aren't quite there yet. Thus, I think intermediate wave 2 will probably develop as a double zigzag, and we are currently beginning wave X.
The bias is still for higher levels on US Russ 2000US Russ 2000 - Intraday - We look to Buy at 1870 (stop at 1845)
Although the bulls are in control, the stalling positive momentum indicates a turnaround is possible. We are trading at overbought extremes. A lower correction is expected. The bias is still for higher levels and we look for any dips to be limited. Preferred trade is to buy on dips.
Our profit targets will be 1940 and 2020
Resistance: 1950 / 2020 / 2140
Support: 1890 / 1830 / 1760
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Russell 2000 Finishing an Ending DiagonalIt appears that the Russell 2000 is approaching the end of subminuette wave 5, which has taken the form of an ending diagonal. Once completed, it should begin minor wave X.
Of all the major indices, the Russell 2000 appears to be closest to finishing subminuette wave 5, so it may be leading the market. Subminuette wave 5 in the Nasdaq 100 also appears pretty close to completion. The S&P 500 and the Dow appear to be lagging behind the Russell 2000 and the Nasdaq 100, with the Dow lagging considerably far behind.
Long RUT For some reason the drawing tools are not loading and I do not have time to keep refreshing it to try so chart is not marked up.
But we're into a 76 retracement and the RUT is clearly way behind SPX and Nas today. Could be a good leading/lager trade. Pretty obvious long at current price. Stop under local low and target 2000.
Russell 2000: historical drawdowns point to more downside riskThe Russell 2000 's drawdown from its peak has been important (-26%), but not as severe as those seen during the dot-com bubble in 2002, the 2008 financial crisis, and Covid-19 at the start of 2020, when the US small-cap index plummeted by more than 40%.
To reverse the current downtrend of the Russell 2000 , the underlying causes must also be reversed, which are primarily rising inflation and the need to raise interest rates.
US ECONOMY: MACRO OVERVIEW
Inflation is now widespread and is not solely due to increases in energy prices, such as oil and natural gas . The United States still has a very tight labour market that requires a rebalancing of supply and demand, to avoid further wage pressures. There are currently nearly two job openings for every unemployed American ( FRED:JTSJOL / FRED:UNEMPLOY ) and the labor-force participation rate has not recovered to pre-Covid levels. The result is a strong pressure on salary growth , which is currently at 11% year-on-year.
The combination of higher energy prices and wage pressures raises labour input costs for US firms. Those who are unable to pass on higher costs to their customers will see their profit margins dwindle dangerously. In addition, since the Fed is firmly committed to raising interest rates , higher borrowing costs represent an additional drag on the growth outlook of small-cap firms.
RUSSELL 2000 index: outlook
The market believes that a recession will cause the Federal Reserve to slow its rate hikes or even reverse its policy stance. However, the Fed's focus remains solely on inflation, as the labour market remains close to full employment. To rebalance the labour market, the Fed will continue to raise interest rates aggressively.
The short/medium term outlook on the Russell 2000 index remains bearish until the Fed signals a change, which is unlikely unless there is a major recession.
A 40% drop from the peak would be a good entry point for opportunistic buyers to step in, indicating a wide bullish positioning clean-up. Such a level of drawdown corresponds to a Russell 2000 index level of 1,450.
The RUT's textbook crash (So far). RUT has had multiple textbook crash patterns to date and if that continues we're going to soon see a capitulation period. Let's look at the markers of a break we have so far.
1/ The butterfly is a common topping pattern which usually forms when price rallies to ATH, has a sharp sell-off and then ranges for a long time. RUT formed this through 2021 and then the final spike of it came into the end of the year when the RUT started to reverse.
2/ After the initial drop we got under the support base that had held all of 2021. Which seems significant. A level holding price for a year is always liable to give us useful info later, and in this case the info we got was when it retested price was pushed away from it. What was once support is now resistance. To put this in an easier to understand why - what traders treated as cheap in 2021 they treated as expensive in 2022.
3/ The 161 break. After the rejection of the year range the 161 was always quite likely to hit but these do not break very often. The breaking of this level I think was significant. A breaking of a big 161 often signals the start of real market crashes.
4/ The market failed to hold before 220 fib. Which usually confirms a real breaking of the 161. Pullbacks are common but a reversal here is less likely. In downtrend continuation we just retest previous fib levels and then head lower to the next fib levels.
5/ A common marker I've noticed in a market break is we hit the obvious support level, have a bounce on that level and when you look at past crashes objectively it's easy to see this is an area where it'd look a lot like a low might be in. And many lows are actually made on supports like this, but in the times these dead-cat and break this is often a sign of complete bull trend failure. Capitulation comes next. Day after day, week after week the market is lower and lower.
A breaking of the last big lows would be the confirmation signal for the bearish breakout as per historic norms.
Long RUT I think my thesis for the short at this level is failing in indices with them all looking really strong intraday and trading above the stop loss zones for my shorts. Often I find these create big squeeze scenarios in which we consistently hold higher lows. Looking for bull entries into dips now.
Could be a good strong trend if we make new highs here. Probably sets the trend for the rest of the week, at least.
Joe Gun2Head Trade - Short term bottom on Russell2000?Trade Idea: Selling EURJPY
Reasoning: EURJPY to continue lower? Broken trend and EUR under pressure
Entry Level: 1752
Take Profit Level: 1794
Stop Loss: 1741.5
Risk/Reward: 4.15:1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.