Unless the Russell 2000 regains strength and marches toward and ultimately beyond 1210-1215, the longer it lingers around here, the higher the odds that shorter-term moving averages will begin to roll over. Even the 50 day moving average is no longer rising as fast as it was just a few sessions ago, and looks to be flattening.
Should that happen, it would have come in the midst of overbought daily conditions.
Hence the importance of 1170, and bulls’ need to defend that level. If it cannot be saved, and by the time daily overbought conditions get unwound, weekly conditions would probably have turned down.
That would be a bad development, since, as things stand now, there is room for weekly conditions to continue to move higher. If small-cap bulls cannot take advantage of this, that would just be a confirmation that the Russell 2000 was lagging its larger cap brethren for a reason.
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
