It is a good idea to watch the Russell 2000 once in a while as it can be a very good leading indicator. The Russell rolled over just about a year ago and has never followed the three other indices.
Besides a little support at the time of this posting, the next price support may happen at 1250! That would also slice the trend line which now has 2 Intermediate degree bottoms.
Crashing through any intermediate degree bottom would force me to look for a Primary degree position!
I have a bearish outlook and until solar cycle 25 starts to run rampant I will not turn long term bullish.
The Gold/Russell 2000 ratio is still expensive at 1.02 so I would like to see that ratio get much cheaper.
The Nasdaq was rolling over in July already which works like a diagonal starting out. If we’re lucky the patterns will smooth out a bit but that may also be wishful thinking at this point.
With there being a potential Cycle degree correction (Bear Market) the markets have a long way to go before we could expect a return to a real bull market.
This may not happen until solar cycle 25 dominates sunspot activity. Our present little rally looks like another bearish rally and if that is true then the 7400 and 7200 price level will not hold.
The 7000 price level is another potential price target for some more support but eventually, the 7000 price level will not hold as well.
The Gold/Nasdaq ratio got better at 5 but is still a far cry from being the cheapest of 1.18. The Gold/Nasdaq ratio doesn’t have to go that cheap but it sure would help to see the ratio get better than 3:1.
The commercials for the Nasdaq are net short but not by any extreme amount. The speculators have the opposite side of this deal as they are all pile onto the long side. Both parties can’t be right so sooner or later one side is going to panic.