RUT Russell 2000 Small Caps Daily Chart Pierces 200-Day MA for First Time in 18 Months Channel Failure

The RUT has teased under the critical 200-day MA for the last couple days finally creating a touch that has not been seen for one and one-half years. This behavior is extremely uncharacteristic for the market going that long without touching the 200-day. Even the drops through the 200-day MA in the back half of 2012 are paltry that never allowed price to truly clear. A mean reversion always occurs just as winter follows summer and summer follows winter. The RUT has fallen out of the multi-month upward-sloping channel. The intraday top occurred on 3/7/14 at 1210.58. An official market correction is -10% so that would be a drop of 121 points off the top and place the RUT at 1089.52 so pay attention to this number going forward. The February low occurred at 2/5/14 at 1082.72.

The central banker easy money pumped markets higher all the way through 2013. Companies use cash on hand and the Fed's low rates to buyback stock and pump the stock price higher to make the wealthy wealthier. The idea is for companies to take the easy money terms and invest in capital equipment and jobs to create a robust recovery but instead CEO's say forget that and prefer to pump the stock price higher since they receive bigger bonuses. The funny part is the common citizen is the sucka paying for the rich to become richer with their tax money. At the same time these middle class and poor folks cannot find jobs and years down the road when the inflation and hyperinflation hits they will be screwed further. You have to love it. If you are wealthy and own stocks you are swimming in luxury buying high-priced property, art, collectibles and other fun things while laughing at the idiot masses that foot the bill. The Fed is collusive to this behavior since they are rewarded for their money printing. Ex-Chairman Bernanke now receives $250K per 45-minute speech to reward him for pumping the stock market the last few years in collusion with the large banks and influential top wealthy 1% of America.

Tech and small caps lead the broader market. Watch the 200-day MA at 1106-1108 like a hawk going forward. The SPX is at 1110 a couple points above hanging on to the bullish side. Serious market trouble begins when the RUT collapses below the 200-day MA. 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.

Note Added 10:57 AM: Whoopsies daisies. The RUT is printing 1106.16. The 200-day MA is 1106.67. "Houston, we have a problem."

Note Added 11:03 AM: RUT price 1103.18. "Houston, we have a problem, where are you? Send the Calvary--quick! Tell BOJ Governor Kuroda to stab the yen so the party can continue." Instead, the dollar/yen is dropping to 101.61 reflecting a stronger yen, which sends stocks lower.

Note Added 11:51 AM: RUT 1102.57. LOD 1102.17.

Note Added 12:23 PM: RUT 1099.14. LOD 1098.78.

Note Added 1:10 PM: The RUT is 1097.77 with a LOD at 1095.79 under the 200-day MA at 1106.63 and approaching the -10% official correction number at 1089.52 and the February low at 1082.72.

Note Added 2:26 PM: Equities recover from the lows at 1 PM and the RUT recovers above the 200-day MA to 1109.39. The market roller coaster ride continues.