Market Direction and Stock Trends

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Russell 2000 Index (RUT) - Getting Toppy »» Weekly Summary Analysis
By: Marty Armstrong | May 8, 2021

Russel 2000 Index Cash opened above the previous high and closed above it as well warning of a bullish posture right now. The overall oscillator position is also turning positive at this time. It closed today at 227163 and is trading up about 15% for the year from last year's settlement of 197486. This price action here in May is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far.

Up to now, we still have only a 1 month reaction decline from the high established during March. We must exceed the 3 month mark in order to imply a trend is developing.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in Russel 2000 Index Cash, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 2007 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The Russel 2000 Index Cash has continued to make new historical highs over the course of the rally from 2002 moving into 2021, which has been a run of 19 years warning that timing wise a pause remains possible.

This market remains in a positive position on the weekly to yearly levels of our indicating models.

The perspective using the indicating ranges on the Daily level in the Russel 2000 Index Cash, this market remains neutral with resistance standing at 228037 and support forming below at 226778. The market is trading closer to the support level at this time.

On the weekly level, the last important high was established the week of April 26th at 232291, which was up 5 weeks from the low made back during the week of March 22nd. We have been generally trading down for the past week, which has been a very dramatic move of 5.050% in a stark panic type decline.

Immediately, this decline from the last high established the week of April 26th has been important Before, this recent rally exceeded the previous high of 228083 made back during the week of April 5th. Nonetheless, that high was actually lower than the previous high made the week of March 15th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 210027 made the week of March 22nd. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 221384. Additional support is to be found at 219248. From a pointed viewpoint, this market has been trading down for the past week.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are rising at this time with the previous low made 2018 while the last high formed on 2020. However, this market has rallied in price with the last cyclical high formed on 2020 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.

A closing above last year's high of 202624 will warn of perhaps new highs into next year. A closing below that number would warn that this year could be just a temporary high.

Critical support still underlies this market at 156910 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.

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