RUT Russell 2000 Small Caps Daily Chart Negative Divergence

The small caps have rolled over like the Trannies producing a lower high and lower low to establish a change-of-trend to the downside.  The red rising wedge resulted in the initial spank down. Then price came back up for a matching high but the flue lines show universal negative divergence in place creating the spankdown over the last two days. The indicators are weak and bleak wanting to see lower lows in price moving forward. The ROC already shows failure compared to one month ago, and the RSI is near failure. The corresponding price from one month ago is far lower so price should want to drop back down to the 900 area. The neon teal lines show an H&S in play with head at 955, neck at 900, so target at 840-850 if 900 fails.  The 200-day MA forms a confluence at the 850-ish area.

A back kiss of the 20-day MA at 943.50 is in order. A test of the 50-day MA at 923 is likely. The purple dots show how price was far elevated above the 200-day MA. This extension behavior was highlighted for the SPX a few days ago. Projection is for further downside ahead and small caps appear to be leading the broader markets so look for this same behavior above to occur with the SPX and Dow starting with failures of their respective 20-day MA's. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.