Updated: Feb 8, 2023

Our last major update on RUT [see: Apr 26, 2022 Update on RUT] we noted that RUT (trading at 1890) had finally broken down below the key support at 2177 as expected and was headed lower.

Frankly, I consider this a lousy setup. Given its history, RUT could bounce at 1918 another dozen times over many months before heading further south. Or, it could plunge the next 200 points in the next couple of days. Since there are no Fibs at [the channel midpoint of 1710], odds are the drop would be either to the Feb 2020 high at 1715 or the .786 at 1554.82.

As it turned out, RUT dropped 189 points (10%) in the following 3 weeks before setting in the range of 1641-2030 for the next 9 months. In so doing, it has passed on several opportunities to flesh out the huge white channel from 2009, focusing instead on remaining above the pre-COVID highs. What’s next?

continued for members…

The latest push back above the SMA200 has brought it very close to the Aug 2022 highs within a well-formed channel (below in red.)

If it’s about to make new highs, then it has potential back to 2177. If, as I suspect, it fails in the next week or so, 1715 and potentially 1536-1554 are still in the cards. This was the original most logical target all along.  The middle ground would be to continue bumping along until the rising white channel midline arrives at the very appealing ,886 Fib level at 1629 around May.

Stay tuned.