Good evening Slope! I wanted to take a look tonight at a market structure within the Russell 2000 that I am tracking. As you know, the Russell has yet to break its 2011 high, diverging from SPX. Let's take a look at how the Russell formed its 2011 top, and see if there is anything we can gain from it.
Below is a daily chart of the Russell. Notice the three key peaks I have noted. Peak 1 is the ultimate high that was formed. After the high, there are two additional key peaks that were made. Peak 2 came close to testing the highs, but failed. It then made a slight retracement, before quickly moving back up to form Peak 3. Peak 3 also failed to reclaim Peak 2. When the trendline breaks, connecting the June '11 lows through July '11 lows, a collapse ensues.