I wanted to highlight one particular index which has me concerned (as we ‘celebrate” two months of the market going straight up since April 7th): the Russell 2000. What we have here is a bearish setup (pink) and a bullish counter-setup (green) that are about to go to war. The $RUT broke to a new counter-trend peak on Friday, completing and pushing above the bullish pattern, and if there’s enough power to push the index above the dashed red line, well, God help us, quality of life for equity bears is going to recede from a “2” down to a “1”.
Simply stated, the Russell needs to start weakening pretty much immediately. The /RTY futures are mashed right up against critical Fibonacci resistance.
The past two months have been quite dispiriting, to put it mildly, which is why I’m down to a mere twelve positions and am using less than half of my buying power. I’m in “wait and see” mode (which, cruelly, could turn out to be fantastic timing for the markets to plunge, since then I’d be furious at being so terrified and so lightly positioned!)
