Market Direction and Stock Trends

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Russell 2000 Index (RUT) - Retest Support »» Daily Summary Analysis
By: Marty Armstrong | July 11, 2020

The Russel 2000 Index Cash closing today at 142268 is immediately trading down about 14% for the year from last year's settlement of 166847. 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.


Moving averages and stochastics are nice confirming tools. They are incapable of forecasting a high or low. They also do not reflect magnitude of a move. They can be a useful confirming tool, but nothing to actually enter a trade on that is consistent.

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 141086 and resistance at 142888 and 142553 for this next trading session. Projected technical Support tomorrow lies at 140467 and 140684. Naturally, opening below this area will cause it to become resistance. Projected technical Resistance stands tomorrow at 143060 143173. Opening above this area will cause it to become support.

OVERVIEW ANALYSIS

Change in Trend Indicator
Daily ........ 140017
Weekly ....... 136635
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.

Factually, 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 86010 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. Immediately, 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 98940 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.

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 Fri. 10th 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.

BROADER OVERVIEW

The historical perspective in the Russel 2000 Index Cash included a rally from 2002 moving into a major high for 2018, the market has been consolidating since the major high with the last significant reaction low established back in 2002. The market has penetrated last year's low. The last Yearly Reversal to be elected was a Bullish at the close of 2018.

On a broader outlook, this market remains in a positive posture on the yearly level while the quarterly level remains neutral on our indicating models. Still, it remains below key resistance on the quarterly level. This implies that the high established back in 2018 still remains important resistance. Immediately, it remains in a positive position on the weekly level but negative on the monthly level at this moment.

This past year alone, saw a significant price drop of about 23%.

DAILY TECHNICAL OVERVIEW


Now, turning to our Energy Models, the market is making new intraday highs in price and our Energy Models are flipping from negative to positive. The low on our Energy Models too place 2 days ago. Therefore, this immediate rally may prove to be short-term unless this model begins to create new 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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