RUT Russell 2000 Small Caps Rising Wedge Overbot Negative Divergence Battle for the 150 MA Slope

The 150-day MA slope is a critical cyclical (weeks and months) stock market signal. The other three major indexes, SPX (S&P 500), INDU (Dow Industrials) and COMPQ (Nasdaq Composite), already display upward-sloping 150-day MA's signaling a cyclical bull market pattern ahead. The RUT is the lone dissenter and the drama now reaches a creschendo since the 150-day MA is dead flat. The last two days the moving average is 1105.46 on Thursday and then 1105.41 on Friday. The slope is still dropping losing 5 cents but the bears are running out of runway. The only way to curl the 150-day lower is for price to move under it but price remains about 25 handles above.

If the RUT 150-day MA slopes higher over the coming days, couple weeks, say over the coming month, then the stock market is in a cyclical bull market pattern and bulls will celebrate. However, if the RUT 150-day MA remains flat and then rolls back over to the downside (which means price will be dropping under 1105 and under 1000 and lower), that is big trouble for the stock market as the other three indexes will likely follow and the stock market could  take a serious stumble lower.

Check the 150-day MA slope for all of your stock positions. If you are long a stock, you want the 150-day to be sloping higher to prove you have the wind at your back. If you are short that ticker, you want the 150-day MA to be sloping downward to prove that you have the wind at your back for the trade.

The red lines show an ominous rising wedge pattern, overbot stochatics, and negative divergence across all indicators. The MACD cross is negative. All these bearish signals create the spankdown (red arrow). The chart is weak hinting at lower lows ahead for price unless, of course, if the central bankers pump. The green lines show the oversold conditions, falling wedge and possie d (positive divergence) that created the mid-February low and bounced stocks higher. The collapses from rising wedges can be quite dramatic. 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.