Dangerous Situation in small caps!Hourly Chart: Top Swing
Daily Chart: Right at the support level. (possible price action for few days)
Weekly Chart: close at the lowest level since February
Monthly Chart: -6.38% since the beginning of July, the Worst performance since March 2020..!
Conclusion: This correction could slip to a bearish market..! Risk is high..!
US2000 trade ideas
Why Small caps are at higher Risk!history tends to repeat itself..! and what has happened in the past has a higher chance of happing in the future!
March 2009 - Sep 2011:
Oct 2011- Jan 2016:
Feb 2016 - Dec2018
I will wait for the reaction to the trend line! closure below the trend line could bring a 20% further correction!
US2000 - Important support and perfect pitchfan for long positioHi friends!
Here a very interesting idea for Russell. You can check the diagonal treding support vs pitchfan convergence and 25 weekly EMA. In my personal opinion, we have an interesting opportunity for long position, So I am opening new long entries. Please let me know your comments.
Thank you!
Israel
Small Caps Are StrugglingThe S&P 500 keeps hitting new highs, but the Russell 2000 small cap index hasn’t been so fortunate.
RUT has gone almost four months without a new record level. In contrast, the Dow Jones Industrial Average and Transports haven’t hit a new high in over two months. The S&P 500 and Nasdaq-100 hit new highs this week.
A few bearish patterns stand out on the small cap chart. First, notice the lack of bounce at the 50-day and 100-day simple moving averages (SMA). This is different from the earlier rebounds at those lines in May and June.
Next, the shorter time frame: RUT’s 8-day exponential moving average (EMA) crossed under the 21-day EMA last week and has remained below it.
Turning to the longer-term weekly chart, we see a bearish inside candle at the end of June. A red bar followed and now we’re in another down week:
It’s not totally bearish overall, but there are growing signs of weakness and poor relative strength. If the market has summer volatility, the sellers may begin their work in RUT.
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Russel finding valueThe russel 2000 has been finding value since a few weeks now.
I feel it comes from the uptrend we had with people eager to see it upper but not willing to pay so expensive.
One thing I noticed though, is the volume going down. Usually a range is breakout is seen after volume start to decrease.
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Small Cap Party is about to finish..! (Bull Trap)As I mentioned before, this recent bullish move is a part of a complex correction in small caps, and it is very unlikely to be repeated in the next 2 weeks!
Looking at the 10 biggest company based on the Market cap will show the reality behind my analysis:
1- NASDAQ:CZR
2- GME
3- NASDAQ:PLUG
4- NYSE:AMC
5- NYSE:RH
6- NASDAQ:PENN
7- NYSE:DAR
8- NASDAQ:NVAX
9- NYSE:DECK
10- NYSE:CLF
Obviously, nothing special happened and there is no money flow in these stocks but AMC..!
buying inverse ETFs like SRTY (-3x) would be a better option with lower cost to benefit from the next AMC crash..!
AMEX:SRTY
Complex Boring Correction..!The Russell 2000 index, created in 1984 by the Frank Russell Company, is comprised of 2,000 small-capitalization companies.
The index is frequently used as a benchmark for measuring the performance of small-cap mutual funds.
Many investors see its breadth as giving it an edge over narrower indexes of small-cap stocks.
In the past 2 weeks, RUT 2000 experienced a +7.3% gain.
As II previously said, this recent rally would not be considered a bullish market because of the low trading volume, but it is a part of a complex correction! I believe this situation could last for the next 1-2 months.
Most probable scenario:
A: If we see lower money flow: Bearish breakout (I think this is the most likely to happen)
B: If we see an increase in money flow: Bullish breakout ( If 6 trillion dollar bill pass fully, this could be the case)