In our last major update on RUT, we noted that a rising channel from  had broken down.  But, we also noted, RUT had since bottomed out and was aggressively backtesting — climbing the underside of the broken channel.

Now, backtests can and — in this rigged market — often do go on to exceed previous highs.  So, the current one could easily climb right on up the belly of the broken wedge to 1213 or higher.

In fact, that’s exactly what happened — thanks to the Bank of Japan.

First, a little background.

RUT’s drop through major support had drawn attention.  Even permabulls had noticed the glaring divergence between RUT and SPX.  And, they were starting to talk.

continued for members…The big picture had looked exceptionally bearish.

Here’s the daily chart, showing some detail on the white channel.And, a closeup showing the miraculous recovery post the BOJ’s Halloween Surprise.  The BOJ’s announcement quite literally could not have come at a better time. Funny how that happened.

It got RUT back above the red channel top and gray channel midline — not to mention a push right through the purple .618 without so much as a pause.

In a normal world, RUT would have easily found its way to 973 by year’s end.  But, it’s been a long time since things were normal.

The resulting new target appears to be 1320 in May 2015.