In our Mar 8 update [see: RUT – How it Got Here, Where it’s Going] we noted that VIX had been particularly sensitive to VIX’s machinations. In the throws of an analog at the time, we suggested RUT might be nearing a turning point.
At some point, probably around Mar 14, VIX will plunge below [support], thereby driving RUT up to or through the .886 at 1595 or to new highs. If the analog holds, it might run out of steam [there.]
As it turned out, RUT topped out on Mar 13 at 1609.05, slightly above the .886 at 1595, and dropped back to the support of its 200-day moving average. It enjoyed the journey so much, it has made two more runs — each within about 1% of the January high.
With SPX backtesting critical support today, could RUT be coiling for a breakout? Or is it about to run out of steam again?
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