Down to the unknown

INDEX:IUX   Russell 2000 Index
The Russell 2000 shows a compelling picture suggesting some kind of decline has started. Just don't know the intensity. Using the wave principle, from May 2014 down to the October low, we do have a clear cut ABC and that was telling us to expect a rally which indeed we got.

Now that rally appears over AND stalled at the point were a potential wave B wave equals 1.382 times wave A, a common occurrence for an expanded Flat or part of running triangle.

Thus, if indeed that is the modus operandi going one right now, one has to expect at least 3 waves down with the most bearish scenario ( expanded flat ) requiring a move below the October low. Regardless of the prevailing pattern, once over, another rally will emerge. We are still bullish long term.

but for the short term we are bearish on all pistons, expecting the best but watching the basket carefully.

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