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2019-04-02
WAITING FOR THE RUSSELL 2000 TO CONFIRM THE NEXT BIG MOVE


While we have recently suggested the US stock market is poised for further upside price activity with a moderately strong upside price “bias”, our researchers continue to believe the US stock markets will not break out to the upside until the Russell 2000 breaks the current price channel, Bull Flag, formation.  Even though the US stock markets open with a gap higher this week, skilled traders must pay attention to how the Mid-Caps and the Russell 2000 are moving throughout this move.

As we continue to advise our clients that the upside pricing cycle in the US stock market is being underestimated, see this research post: we also believe that increased volatility and price rotation will continue to drive larger rotations in price before the final breakout upside move takes place.  We want to continue to warn traders that we still don’t have any confirmed upside breakout with price continuing to stay within this price channel in the Russell 2000.  Eventually, when and if the price does breakout to the upside, we will have a very clear indication that continued higher prices and a larger upside move is happening.  Until then, we need to stay cautious about the types and levels of rotation that continue within the markets.

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