Bigworld, RUT does look vulnerable near term, with next support around 1315, and then key support around 1278 (the rising 200 MA) and then the 1200-1265 area (Sept/Oct trading range).
That would probably be it though as far as a moderate correction goes. Anything beyond that, like you're talking about (below 1100) would probably require some bigger problems for the overall markets/economy, or a black swan event, etc. It could happen, but if that hasn't happened I'd cover any short if it gets down to 1200-1280 and then re-evaluate the situation from there. The problem with a semi-permanent short position is you'd be trying to time the big collapse, which might not come for years.
For RUT to consolidate back to 1250-1280 will be viewed from a TA perspective as a healthy correction, and a potential buying opportunity since the index is still in a long term uptrend.
