Market Direction and Stock Trends

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Russell 2000 Index (RUT) - Temp Low »» Daily Summary Analysis
By: Marty Armstrong | July 25, 2020

The Russel 2000 Index Cash closing today at 146755 is immediately trading down about 12% 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 146755. 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 146907, 147631, and 149418 for this next trading session. Projected technical Resistance stands tomorrow at, 147362, 147459, 149571, 149619. Opening above this area will cause it to become support.

OVERVIEW ANALYSIS

The Russel 2000 Index Cash made a new low penetrating the previous session's low and then closed below that level crashing sharply by 2.72%. This market has declined after making a high in the previous session, and this type of trading pattern warns normally of a further decline ahead. If the market opens BELOW today's low of 146610, then we can see a slight panic to the downside. In the process, we have elected two Daily Bearish Reversals.

At the moment, the market remains neutral on the momentum indicator yet bullish on the short-term trend indicator while the long-term trend and cyclical strength are bullish. The Superposition Reversal for tomorrow will be 143720 and a closing above that even after the election of Daily Bearish Reversals today, will imply a turn back to test overhead resistance will be possible. This last rally managed to exceed the previous high intraday.

Change in Trend Indicator
Daily ........ -147608
Weekly ....... 138635
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.

At the moment, 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 3889 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. At the moment, 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. 24th 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 are nearing the closing of this month with just 7 days to go. The next Monthly Minor Bearish Reversal resides at 110257 whereas the next Monthly Major Bearish Reversal is to be found at 98120. Immediately, the market is very bearish below all our indicating ranges. However, the quarterly level is also neutral for now, yet the weekly level is also somewhat bullish. We also have a Minor Monthly Bearish which is a bit further from the market right now. This resides at 110257 and therefore, a month-end closing below this Reversal will signal a sharp decline to retest of support is likely.

Since the last trading day of this month and quarter happens to also be the end of a week, then we additionally have Weekly Reversals coming into play as well. The next Weekly Minor Bullish Reversal is standing at 0while the Major Weekly Bullish stands at 0. However, the next Weekly Minor Bearish Reversal is to be found at 110938 while the next Major Weekly Bearish Reversal is located at 118108.

Therefore, when we put this all together, the various timing levels require our focus on the following Bearish Reversals for the close of this month. The numbers to watch are: 146470, 110257, and 0

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 viewpoint, 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


The perspective from our Energy Models, the market is making new intraday lows in price while our Energy Models are still positive but declining right now.

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. Looking at the weekly short-term level, this market is still bullish on our momentum and trend indicatorsOverall, the posture is generally bullish for now.

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