What's the Russell 2000 telling us ?

15 Apr 2021

Hi there. Beginning trader and technical analyst who received my education from TRi school of trader development. *My charts are not financial and/or trade advice and are posted for entertainment purposes.




Another day with head buried in charts. If there are any small cap, bottom hunters like me who have been in there hunting things that seem like they aren't going to stop going down or have finally found a bottom, then you may have been wondering when things might turn, and we begin seeing our portfolios going back up, and we can more aggressively hunt favorable long entries that show indication of stabilization and turning to add to our position.


Well if this chart is any indication I'm starting to think the time may be soon. I'm starting to see some double bottoms coming in on price and indicators, granted it is as the top of price action. It does look like price action has broken out of a potential Head and Shoulder Pattern and will be invalidated at the areas noted in chart.

Some fundamental considerations: Inflation fears particularly impact small caps and their cost in production. Possibly, there is a momentary pause on new money coming in from recent retail investors who have entered small cap positions in the past on the hype and Robinhood usability. Perhaps their retail money has been temporarily redirected to a more enthusiastic and euphoric crypto market? It will be interesting to keep an eye on the Russell to see if any sharp down turns-or more euphoria- in that space impact the 2000's trend.


Appreciate sharing of different perspectives on my analysis or sharing of your own. Thanks for stopping by.



Happy hunting.









RUT

12 Mei 2021

Dagangan aktif

Russell breaking down. Will have to pause any new long entries in small caps until a clearer picture forms on a deeper correction or continued uptrend. I suspect when cryptolandia cools down there will be a rush of retail money back into small caps by buyers looking for quick returns. Maybe summer early fall? Will have to wait and see.