Market Direction and Stock Trends

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Russell 2000 Index (RUT) - Temp High »» Daily Summary Analysis
By: Marty Armstrong | July 18, 2020

The Russel 2000 Index Cash closing today at 147332 is immediately trading down about 11% 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.


The Russel 2000 Index Cash opened within last year's trading range which was 168168 to 132518. Right now, the market is still trading within last year's range with the last print at 147332. The last time such a similar pattern took place was 2018. Nonetheless, the market is trading below the opening print for the year which was at 167590. As long as this market remains trading above 134065 yet below the opening print on a closing basis, then a similar year-end closing in this posture will warn that we could have a knee-jerk low in place this year.

Always remember that the true definition of a bull or bear market is defined by its international value expressed in the major currencies. A market which is rising in proportion to the decline in the local currency is merely a market readjusting to the decline in the value of the currency. Do not be fooled by this type of trend for it is merely currency inflation given everything has a true international value which will be arbitraged.

PIVOT POINTS

Looking at our Pivot Points, the market is trading BELOW all three indicating numbers and that leaves this in a bearish position currently with resistance at 147681, 149671, and 151190 for this next trading session. Projected technical Support tomorrow lies at 146968 and 147060. Naturally, opening below this area will cause it to become resistance. Projected technical Resistance stands tomorrow at 147513 148829. 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 148240 and closed higher. Nonetheless, the market remains positive on our system indicators still with some overhead resistance. This market has not closed above the previous cyclical high of 148505. Obviously, it is pushing against this resistance level.

We did close below the previous session's Intraday Projected Breakout Resistance indicator which was 149935 settling at 146756 gesturing that the market is not in a breakout mode at that precise moment. The current Projected Breakout Resistance for this session was 148297 which we still closed below. The Projected Breakout Resistance indicator for the next session will be 149149. 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 149149 during the next session warns the upward momentum may be lost and a retest of support becomes possible.

Intraday Projected Breakout Resistance
Today...... 148297
Previous... 149935
Tomorrow... 149149

Change in Trend Indicator
Daily ........ 142883
Weekly ....... 137985
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 2974 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. Up to now, 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. 17th 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 perspective, 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%.

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