Market Direction and Stock Trends

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Russell 2000 Index (RUT) - New Pattern Forming »» Daily Summary Analysis
By: Marty Armstrong | July 4, 2020

The Russel 2000 Index Cash closing today at 143186 is immediately trading down about 14% for the year from last year's settlement of 166847. We did elect one Daily Bearish Reversal. Reflecting on the Reversal System, the last Reversal on the Yearly level to be elected was Bullish. The Quarterly level also shows the last Reversal to be elected was Bullish. On the Monthly level, the last Reversal to be elected was Bearish showing that the mid-term level is still negative. The Weekly level shows that the last Reversal to be elected was Bullish showing that the mid-term level is still positive. So far, this market has been an outside reversal trading year exceeding the previous year's high and breaking under last year's low. Since it is also trading below last year's settlement, this market still remains in a weak bearish position on a broader perspective.


The Energy Model is measuring the bulls against the bears. It is providing a different measurement of how much 'energy' remains in the market from the long-side. Therefore, if people are recently long, it shows to what extent that represents the whole of the market position. A crash is possible when energy is at a high level and a rally is likely when energy is negative. This is based upon our proprietary models and not the published numbers of longs and shorts.

PIVOT POINTS

Looking at our Pivot Points, the market is trading above one indicating pivot implying that this market is in a positive position with support at 142903 and resistance at 144813 and 148553 for this next trading session. Projected technical Resistance stands tomorrow at, 143237, 143390, 143883, 146969. Opening above this area will cause it to become support.

OVERVIEW ANALYSIS

The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 145941 and closed higher. Nonetheless, the market remains positive on our system indicators still with some overhead resistance. Given the inability to close above the previous key high leaves this rally as purpely a reaction. Penetrading today's low of 142855 during the next session will warn of a sharp decline becomes possible.

We did close below the previous session's Intraday Projected Breakout Resistance indicator which was 144585 settling at 142731 gesturing that the market is not in a breakout mode at that precise moment. The current Projected Breakout Resistance for this session was 145431 which we exceeded intraday; however, the market was unable to sustain that move and it closed back under this indicator. The Projected Breakout Resistance indicator for the next session will be 146311. Now this immediate indicator in the current trading session, is above the current close offering projected resistance. Therefore, we either must open above it and hold or close above it to imply the rally is still in play. Otherwise, failure to exceed 146311 during the next session warns the upward momentum may be lost and a retest of support becomes possible.

Intraday Projected Breakout Resistance
Today...... 145431
Previous... 144585
Tomorrow... 146311

Change in Trend Indicator
Daily ........ 140596
Weekly ....... 135580
Monthly ...... 106090
Quarterly .... 129292
Yearly ....... 118169

Note: Negative means the market is trading below that level on a closing basis. The broader change in trend takes place only on the monthly to yearly levels. Those looking for exit strategies may look at these numbers on a closing basis per level.

Presently, we have broken below last week's low and that means we have generated a new What-If Weekly Bullish Reversal which lies above the present trading level at the general area of 10665 warning that this decline has still not punched through important overhead resistance. A weekly closing beneath this level will keep this market in a bearish tone. Currently, we have broken below last month's low and that means we have generated a new What-If Monthly Bullish Reversal which lies above the present trading level at the general area of 1415 warning that this decline has still not punched through important overhead resistance. A monthly closing beneath this level will keep this market in a bearish tone.

END OF WEEK

At present, this market is making lower lows implying a bearish undertone has been in play. So far this week the trading range has been 145941 to 138104. The market has made a new high this week and the extent of this rally has been 13 trading days. All four primary Weekly Bearish Reversals were elected from the low established back on the week of June 22nd. The projected technical support this week resides at 132885. The first level of our projected technical resistance has been exceeded 145810, but the market may be running out of steam on the upside. Clearly, as of the last close, the market remains below this projected resistance level. The second extreme projected resistance remains standing at 153275.

RECREATING TIME

Note: Time is relative so this model creates time so we have a Yearly Bullish/Bearish Reversal Each Day. This allows us to see if the broader trend is shifting instead of having to wait for year-end.

Based upon our Dynamic Yearly Models where time is relative, assuming today Thu. 2nd would be constructively the end of the year, we are currently trading above all Dynamic Yearly Bullish Reversals for today's theoretical year-end closing. This is on all four dimensions implying we are still in a broader bullish trend for now. Keep in mind, that these are dynamic reversals good EXCLUSIVELY for today only.

We closed the previous month at 139404 after making a new high up two months from the low established back in May during 2020 at 153974. Right now, this market has moved down in a bearish posture below all our monthly indicating ranges which is an advance over from the previous month. The next Monthly Minor Bearish Reversal resides at 110257 whereas the next Monthly Major Bearish Reversal is to be found at 98120.

DAILY TECHNICAL OVERVIEW


Focusing on our Energy Models, the market is making new intraday highs for the past 6 days in price. The low on our Energy Models took place 3 days ago. Therefore, this immediate rally may prove to be short-term unless this model begins to create new historic highs.

OVERALL TREND

The Russel 2000 Index Cash is in bearish position on the quarterly short-term level of our model while the broader term is neutral to bullish implying that the long-term bull market is still holding. Turning to the monthly level, this market remains in a bearish position. Overall, the posture is generally bullish for now.

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