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Replies to post #36981 on Market Direction and Stock Trends
05/15/21 6:45 PM
The Russel 2000 Index Cash has been in an uptrend for the past 2 days closing above the previous session's high quite significantly by 1.80%. Currently, the market is trading in a neutral position on our indicators but it is trading strongly higher up some 4.33% from the previous session low. Our projected target for closing resistance for the next session stands at 227346, we need to close above that target to imply a further advance. Failure to even exceed this intraday warns that the upward momentum is starting to decline. Nevertheless, this session closed below our ideal projection for closing resistance warning that the market which stood at 223823 is forming a high. A break of this session's low of 217113 will warn that we have a potential temporary high in place.
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.
Solely focusing on only the indicating ranges on the Daily level in the Russel 2000 Index Cash, this market remains moderately bearish position at this time with the overhead resistance beginning at 222570 and support forming below at 221259. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply a bounce is unfolding.
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 2 weeks, which has been a very dramatic move of 8.207% in a stark panic type decline.
Immediately, this decline from the last high established the week of April 26th has been important closing sharply lower as well. 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 220820. Resistance is to be found starting at 224757. Looking at this from a wider perspective, this market has been trading up for the past 2 weeks overall.
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. Nevertheless, the market is trading below last month's low warning of weakness at this time.
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