Russell 2000, RUT Update

 

The Russell 2000 index has lost support and is one of the first indices to do so. I’m sure there will be more joining this club  but you may not hear about it until the SP500 or the DJIA does the same thing. The wave count also has an expanded top to it, which most wave analysts don’t even look for. The Cycle degree wave three top finished in January 2018, while the secondary top of August 2018 was a “B” wave top in Intermediate degree. These expanded tops are very important patterns because they also forecast the fact some time in the future this market will once again push to another new record high. If the big bear crushes RUT to below 500 then I would have great confidence in saying that RUT will exceed 1742 again.

The problem with making a forecasts way too early is that investors will think it’s going to happen soon!  A bear market is only a correction to a bigger bull market in Cycle degree. The next bull market will be a solar cycle induced 5th wave in Primary degree. Just like the majority missed the 2009 bull market so will the next group of investors. Every major wave analysts expert missed the 2009-2018 bull market because e they though a wave 1 in Primary degree just ended!

Buying into a market that is so overpriced will always burn the participants (Investors) and this time we can see it’s not any different. Of the top of my head, we may have about 5 expanded patterns in progress so it’s not just a single one shot deal.

The Gold/RUT ratio is sitting at 1.1532:1 which is expensive by any stretch of the imagination and 2.63:1 would be cheap in the world of ratios.

 

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