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Russell 2000 continues to find support in the 650 area. Today is one of the better one day rallies the Russell as seen over the past 6 weeks as it gapped higher today. At the current time the Russell 2000 is very close to a falling resistance line drawn from off a potential short-term right shoulder at (2).
The Russell 2000 has been about 40% weaker over the past 90 days, than the S&P 500. How it handles this resistance after today becomes very important, with the potential H&S looming overhead!
There’s also a very well defined inverted flag in there that was broken Tue/Wed. While it peaked higher, Monday’s close was right at the bottom of the flag.
Leonardo…650 level on a short term basis looks like a neckline remains in play as support. On a weekly closing basis, the Russell did not close below 650. Quality H&S patterns that have big influence take longer to form than the little one I have highlighted in this Russell chart.
One day doesn’t make a trend, yet the Russell did make one of the largest bearish wicks I could find in years!
Thanks for the question and viewership,
Chris
Question: Does the fact that we broke the 650 support but quickly recouped it negate the H&S pattern?
Andrew…Gaps do get filled, one just never knows when.
I noticed the gap higher today in many names as well. Just wondering what your point is there? From a technical standpoint, I have read that markets don’t like gaps and often tries to fill them, thus forshadowing a reversal in this case?