RUT has been under pressure ever since June, shedding 16.8% to tag our downside target of 1078 on Sep 29. While SPX’s Sep 29 lows were higher than its Aug 24 lows, RUT made new lows. It was a more complete looking correction. But, the subsequent bounce has been less than impressive.
When it broke out of its falling channel to complete an Inverted Head & Shoulders Pattern in late November, it had a chance to redeem itself. It was the perfect opportunity: a low volume weekend with USDJPY on the rise. 
Instead, it gave up 8% over the next two weeks. What happened? More importantly, can it recover?
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Unfortunately for bulls, that was the week that USDJPY should have at least tagged the TL off its June highs. But, it came up short. Not only did it not break through, it didn’t even reach the TL. Aside from some FOMC-related silliness in mid-December, it’s been falling ever since.
CL, however, has been staging what appears to be a recovery. It hasn’t broken out yet; so, I’m skeptical. But, it at least has the potential.
USDJPY continued falling until it reached (well, almost) the most important support on its entire chart: the yellow .618 at 120.11. If it holds/bounces, then RUT should get another bite at the apple.
A return to the neckline at 1205 in the coming days (a 5% move) would give it another chance at new highs. The completed pattern would target 1304.
But, it would need to break out of the falling white channel again — a feat that will only be successful if CL or USDJPY can make some meaningful advances. Bulls’ immediate objective, then, is to push past 1170.
Stay tuned.