RUT Russell 2000 Small Caps Monthly Chart

The market bears receive a major slap in the face yesterday. All four major indexes, the SPX, INDU, COMPQ and RUT; the S&P 500, Dow Industrials, Nasdaq Composite and Russell 2000, respectively, now have price above the 10, 12 and 20-month MA's. The Russell was the last one to overtake these key moving average thresholds yesterday.

The RUT 10-month MA is 1204 and the 12-month MA is 1203. Price is 1204. The importance of this drama cannot be understated. The stock market wins big if RUT moves above 1205 heading higher. The major indexes will be on their way to new all-time record highs. If, however, the RUT stalls here at 1203-1204 and retreats, that is a signal that the bears will begin growling again and stocks will begin selling off and trending lower. The fight is for all the marbles.

The SPX 10-month MA is 2058, 12-month MA is 2057 and 20-month MA is 2031. The 2057-2058 should be considered a cliff edge for markets. The broad stock market will collapse, potentially into free fall, if SPX loses 2057 but the bulls are comfortably above. Watch RUT 1203-1204 like a hawk; it will tell you the market direction answer going forward. 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 12/3/15, Thursday, Before the ECB Rate decision and Opening Bell: In the Wednesday session, the RUT teased above the critical 1203-1204 resistance gauntlet but failed tumbling lower. RUT ends the day at 1192. The battle at 1203-1204 should continue.