Russell 2000 - Please Stop Buying ItPick any path you want, none look appealing from a bull's perspective.
I created this chart today because I found incomprehensible that the Russell tape kept getting bought aggressively into today's close. Forget about the fact that this index has tested the lows of this triangular range (black date range above) several times, but what is more troubling is that these are small-cap companies trading at what used to be Blue Chip prices, like a year ago.
Small caps should be respected for their bearishness; they are the first to get punched when the indices agree downward and they are also the hardest to get punched. This makes sense because smaller companies are less likely to maintain operations during times of economic hardship due to a number of logical cash-flow-related items. Thus, while it hasn't been made abundantly clear by the media or US politicians yet (Europe is less delusional) that the economy is doing not-so-great, I find it ridiculous that the only index to get aggresively bought during this intensely bearish afternoon session was the Russell 2k.
This is a testament to how little people fear markets these days, or rather, it is that they have only experienced this 2020 rally and do not care/were not alive during the year 2008. The type of fear that has been omnipresent since January 2021 is that of FOMO. Typically, when people are fearful of transient, bearish price action, the natural reaction is to panic-sell. Well, it's now clear that we have entered a new age where it is human nature to panic buy the riskiest assets when markets show bearishness.
I only kid, of course - there is no actual no new age of anything. In fact, I'd imagine that it'll only take the first near-term apolcalyptic selloff to reprogram the market masses.
All I ask is that you not be long the Russell at times where it makes more sense to be long just about anything unrelated to stocks.
-Apigolyptic Selloff 2k21
AMEX:IWM
RUSSELL:RUT
GLOBALPRIME:US2000
TSE:SMALL500
BMFBOVESPA:SMLL
SPCFD:SPX
NASDAQ:IXIC
DJCFD:DJI
CURRENCYCOM:US500
CURRENCYCOM:US100
CURRENCYCOM:US30
CBOE:RVX
USSMALLCAP2000CFD trade ideas
My favorite color is RED..!I prepared all my followers for this and convinced them to sit on Cash, Buy inverse ETFs, and Short The market..!
My followers are the happiest traders today. and I am happy to see their smiles on the worst days of the market..!
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I have lots of technical and fundamental reasons that this correction will be different and is going to be more than 10%, you will see the technical reasons in my charts. Let’s review the fundamentals:
1- The most important factor is limiting margin for hedge funds by banks, after Archegos capital management phenomenon..!
2- The Buffett Indicator was at elevated levels before the dotcom crash of 2000 to 2002, and before the financial crisis of 2008, but at respective values of 137% and 105%, lower than today's reading of 157%.(Stansberry research)
3- Americans are now holding more money in stocks than ever before... and that includes the peak of the dot-com bubble. The data is from JPMorgan Chase and the Federal Reserve. It includes any stock that folks may hold in 401(k) accounts as well.
Right now, 41% of our financial assets are allocated to stocks. Again, that's higher than the dot-com peak of 37%.
4- Constant money out flux since early 2021 which decreases the trading value in more than 95% of stocks!
5-Margin debt stands at $822 billion – an increase of more than 25% since September of last year.(Stansberry research)
Conclusion: Any factor that limits new money influx will have negative effects on markets, and Bubbles always burst when they have their biggest size!
To protect your capital:
*Use tight stop loss even for your long-term investments.
** Hedge your positions using inverse ETFs like SQQQ, SPXU,…
*** Always accept the loss when it is small, if it becomes bigger it will become harder to accept!
Moshkelgosha
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US2000USD (Russell) - LONGThis appears another nice buying opportunity in the RUT.
RVX (Russell Volatility is not breaking out to the upside)
Dollar remains weak, commodities strong.
Nothing in the cycle has had a meaningful change yet, nor has the LT trend.
This appears another higher low in the cycle.
RUT - Russell 2000 on decline? - sharp drop and reverse in play!
Wolfe Wave on 15min - sign of a massive quick drop to support a final major trend reversal
a massive Bat harmonic on DAILY needs to finish
divergence on H&S top on major time frames
similar H&S structure to Feb/March 2000 drop
BLACK SWAN? - a Russia(Belarus & Turkey) WAR against Ukraine
Russell 2k - LONGLower bound of calculated range on price and volatility, potential nice wave pattern forming. Needs a little room its been the laggard of the indices, but so so was Nat Gas or XLK for a while, then kapow, the vol sinke and the consolidation ends and the rally ensues. Patience is key. Will post update with SL and another chart, we had our fill in futures at 2211. Todays calculated range 2229-2271. Also, SPX implied vol premium is high while it too is near the low end of its calculated range. These are positive or bullish signs.
Russel is lagging but may reach 3,000 Russel 2000 does not demonstrate strength yet, and the most probably scenario - it to go towards 2,000 level first before the uptrend resumption. That will be a perfect level to buy in with target around 3,000 which is the upper line of multi year channel.
If the wave count is correct, then we are in the 4th wave, which should be a zig-zag, as per rule of alternation since wave 2 has a flat structure. So, one more leg down is missing, and we can see that price is experiencing problem with making new high while S&P500 and Dow are rising.
Russell 2000 Holding the 50-day SMAThe Russell 2000 had a strong move coming out of the vaccine news in November. It’s been consolidating for the last two months and now may be ready to continue higher.
The main thing jumping out of today’s chart is the 50-day simple moving average (SMA). RUT tested it in early March and has chopped on either side of it since. But now prices are trying to hold it as they squeeze into a tight range.
Second, notice the relationship with the 10-day SMA, which is rising up toward the 50-day SMA. Other times when it crossed above in May and October were followed by periods of strength.
Finally, notice how the MACD histogram has inched back from bearish toward neutral. Like the 10-day SMA versus the 50-day SMA, it hasn’t crossed yet. But it could be worth watching.
Overall, the data seems to be confirming the economic recovery and restrictions are loosening in various jurisdictions. Small caps have been one of investors’ favorite ways to position for that reopening trend, so buyers may return as the summer approaches.
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RUT Bullish wave (5) RUT daily chart shows small caps is setting up for a wave (5) rally that could reach 2528. Up to the daily time frame and above, the RUT remaining bullish against the wave (C) support level at 2100 for now. We are interested in establishing long positions like a bullish vertical that expires in May 2021.