Russell 2000 Intraday Bear Market Review


It has been awhile since I looked at the Russell 2000 but it sure looks like it’s finally over on the bearish side. These are some wild patterns that just barely fit into diagonal waves, as the “B” wave portion traveled to the limit, just short of breaking out again.  If this is still true, then eventually the Russell 2000 has to dip below the 1330 price level. This is when the inverted flat will be confirmed as being a bearish rally.   This should lead us to a potential wave 3 in Minute degree  and then waves 4 and 5 will still need to develop. 

That will be a tall order, but diagonals can produce some real wild moves, where we can scratch our heads until there is no hair left, trying to figure out where we are.  Sure, we can call all the moves as impulse waves, so it is real simple, but the markets give us simple waves to fool us. Waves are never what they look like for the majority, because if they were, then all wave analysts would be billionaires.  

With the potential of Cycle degree wave III being completed, we are looking for a Cycle degree correction from our choices of three types.   A triangle is far back at the bottom of the list as there is no time for it to develop in the next 2-3 years. I like the flat as my favorite at this time, but we may get the first move as a zigzag. 

Unless the markets have some real fast down days, any “A” wave in Intermediate degree is still a long way off.  Overall the markets could lose two thirds before we see any type of a real bottom.  Most wave analysts will be expecting the markets to go much lower, but I’m sure these markets will fool us all and not travel to new record lows.  Besides that,  the Russell 2000 is building a major base at the 2009 lows, which will act like a leading indicator when it happens. 

I don’t see any depression, even at the bottom of Cycle degree wave 4, as there is just too much currency floating around. Sure, when the experts call it that a we are in a recession, then that recession will be over and a huge bull market will develop. Just like the majority wave analysts missed the last two big bottoms, I’m sure they will miss the next one as well.  Ignoring all market sentiment in favor of drawing a bunch of useless numbers and letters is not my idea of an effective wave count, as the contrarians in the world do a much better job of buying low and selling high.

Every contrarian indicator that the real contrarians use, should be incorporated into the EWP.  Over the years I have talked about all these indicators regularly.  

At  present the Gold/Russell 2000 ratio is sitting at 1.09, which means it takes 1.09 ounces of gold to buy one unit of the Russell 2000. This is breaking all expensive records of the Russell 2000.  Until that ratio starts to get bigger, or spread no bull market can sustain itself, except for big bearish rallies.  

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