RUT Russell 2000 Small Caps Daily Chart New All-Time Record High Overbot Negative Divergence Golden Cross

The Russell 2000 small caps punch out a new all-time intraday high at 1217.01 and new all-time closing high at 1215.21. The wine is flowing like water. Price was held at bay by the bears at 1187 (purple line) for one-half year but last week the bulls punch the bears in the face gapping up through the important 1187 resistance setting up a test of the 1213 July high and boom, the momentum and bullish market euphoria pushes price higher.

The red lines signal negative divergence so the new high in price comes without enthusiasm. The RSI and MACD line in the shorter term (days) are long and strong so that will help price remain lofty for a few days but overall the move higher is not impressive despite its historic importance. The MACD cross is positive a plus for bulls so monitor this as the days tick forward.

The ADX is interesting, down in the doldrums, clearly showing that the move higher is not a strong trend. Note that the prior central banker-induced rally in October through early December was a strong trend higher (pink box; ADX above 25) but that petered out during November. If stronger markets were on tap ahead, the ADX should be above 30 right now. The black circle shows the death cross pattern (50-day MA down through the 200-day MA) and the golden cross is shown by the gold circle (50 up through the 200) so this is a plus for bulls.

The 150-day MA has been highlighted over recent months since it is a key indicator for a cyclical bull pattern versus a cyclical bear pattern depending if the slope is positive or negative, respectively. The green and red lines are added on top of the 150-day MA to show you how the RUT dropped into a cyclical bear pattern in late May but that was quickly reversed, then again in August, but that was reversed back to a cyclical bull, then again in October, only for the bulls once again to create a positive slope for the 150 and now have a cyclical bull market pattern in play. This fight continues so monitor the 150-day MA for the RUT and other major indexes, even for your own plays, as the new year begins. The projection is simply for lots of sideways ahead. The bulls left a big gap at 1175-1187 that will need filled in the future. 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.