Russell 2000 Intraday Top Review


Basing any wave count on just one index can give us many false starts. I like to scan a few other indices, as some can take the lead on a directional move. In this case the Russell 2000 saw its last high back in April, 26, 2017.  For this Russell 2000 to catch up to the other indices, it would still have to  soar to new highs. That would also mean that the other indexes still have a long way to go up as well.

We do have a fairly good start to an impulse, so this rally can run out of steam as well. Then the other big three indexes sure would follow and we would be on track to the start of another strong correction or the end of a big bullish phase, that had one of its beginnings back in early 2009.  This I consider as “one” move with 5 waves in Intermediate degree.  Since it is a 5th wave, the entire move was a diagonal 5th wave. Sooner or later any big bearish move will become obvious to the majority and they will be thinking about getting out. When the media is all in a panic and selling as fast as they can, then this market will perform a miracle and start a huge rally.  Why?,  because the markets  will do the opposite of what the majority thinks it will.

It will still take some time before we can see this about to happen, but remember that markets can’t go to zero as the Russell 2000 is developing a huge base  down at the 300-400 price level.  Since 2000 all the bottoms have worked as 4th wave bottoms, as all of our tops work as wave 3 tops.

At his stage of the game Cycle degree wave 3 could have finished but as usual, it still may take time before it will hold. There is no way that I can remain bullish as chasing the last little upside, is a fools game. No smart, experienced contrarian investor or trader,  will jump on this bandwagon, but the majority love to buy high, so who is going to deny the crowd instant gratification.   A herd of investors,  act just like a herd of bulls or buffalo and they convince themselves that, “This time it’s Different”. Of course they sniff each others asses which sends them in a trance,  breathing methane destroying all hope for any critical and logical thinking.

Markets work on emotions, as the fundamentals are lagging indicators not a leading indicator.   All our hindsight opinion should always be turned to use as foresight, because that is what the EWP is supposed to do with good use of idealized charts.

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