Trend is up still until we lost that lower trend line. We are more than 50% back from the ATH and the sell off reversal area. Love that little doji that formed on Friday. We most likely break in the direction of the high or low with strength. My upper target on RTY is 1530.7 then 1560 area.
Lower areas of support 1498-1500, lower 1478-80, and 1465 (and 18 day...
I am not a big proponent of trendlines but this pattern is coming to a head real soon. This wedge lines up with a bunch of other stuff I am seeing, hearing, feeling.
Not sure how or when it plays out but it would seem logical to sell a bit in to the strength and buy some puts about a month out.
The Russell 2000 futures, that represent small caps and broader market strength, is primed for a directional move. A mature multi day balance has a potential for a breakout to upside. The upside target levels are marked. The related indices just broke to upside today. The Russell has a potential to catch-up.
Since anticipating a bottom on Dec. 25, we have seen a significant and vicious bear market rally - enough to scare many bears and draw some bulls back in. I'm seeing some setups now that this rally is near the end, so I'm selling longs and will be opening shorts into any further rallies this week.
Here we have the Russel2000 where a significant breakout midpoint...
The big Sunday night gap saw the Russel blow past my target and actually top out at the 127% extension of 1560 rather than the previously posted (linked) 1540 level.
Stock indeces are currently filling much of this major gap, in fact the Russel has already filled it while the S&P500 and DOW and especially the NASDAQ have seen more strength keeping their gaps...
The small caps have been killed but I think we may be in for a nice bounce targeting the 1590 area for 30 point upside.
Directional Bias: Long
Price Target: 1590 on RTY Futures
Good Entry: 1548-1555
Risk/Reward: Max risk of 10 points/30 point reward.