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Replies to post #37122 on Market Direction and Stock Trends
05/31/21 9:14 PM
Russel 2000 Index Cash closed today at 226897 and is trading up about 14% for the year from last year's settlement of 197486. Presently, this market has been declining for 2 months. This price action here in May is warning that we may have at least a temporary high in place beginning perhaps a bearish reactionary move on the monthly level if we see lower prices next month or close lower. Otherwise, there remains the potential for a one-month Knee-Jerk reaction low. As we stand right now, this market has made a new low breaking under the previous month's low dropping to 213225 intraday yet it remains trading back above that previous low of 226645 implying near-term strength.
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 OVERVIEWN
EAR-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.
Focusing on our perspective using the indicating ranges on the Daily level in the Russel 2000 Index Cash, this market remains moderately bullish currently with underlying support beginning at 224443 and overhead resistance forming above at 229441. 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 up for the past week from the low of the week of May 17th, which has been a move of .0561%.
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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