Russell 2000 (Leader?) AND DJIA Signal Likely Multi-Month Peaks! Sell-off Begins.

08/02/23 Weekly Re-Lay AlertRussell 2000: Leader or Laggard?” 

 Is the Russell 2000 a leader or a laggard?

Is it providing advanced warning of major tops and bottoms… or waiting & watching other indexes for guidance & direction (and then following)?

Should it be trusted… or doubted?

The answer to those questions hinges more on one’s perspective than on what the Russell 2000 is doing or not doing.  From certain perspectives, the answer is ‘yes’… to all six of those questions.

It is a leader AND a laggard.

It DOES provide advanced warning but ALSO moves after other markets have confirmed reversals or trends.

It should be trusted – as an entity of itself – and should be doubted, if trying to apply its influence to others.

In other words, analyze it independently but be very slow to try and directly correlate it to other indexes.

It WAS the first index to peak in early-Nov 2021 and to give an intermediate sell signal.

It was the first, and the most precise, to reach the upside price targets for a wave 5 of V (multi-year) peak in Nov ’21.

It was the first to spike right to a major upside range target and the first to break below its initial downside wave target.

It was also one of the first to signal a June ’22 bottom.

The Russell 2000 is also the primary index to signal that new all-time highs are NOT likely during this 2023 rally… even as other indexes are projecting retests of, or rallies above, their late-‘21/early-’22 peaks.

The Russell 2000’s uncanny adherence to range targets and range parameters has been the focus of many articles and reports since late-2021… 

More recently, the Russell 2000 was expected to rally to 2000.0/QRU in July as it set the stage for a potential ‘B’ wave peak.  It accomplished that and has consolidated for ~two weeks but would not show any signs of a top until a daily and weekly close below [reserved for subscribers]…

The Russell also spiked higher into July 24 – 28, ’23 – the fulfillment of a ~6-week low-low-high-(high) Cycle Progression, successive 18-week advances, and a 25-week high-high-(high) Cycle Progression… and an initial fulfillment of its monthly LHR.

As for other equity indexes…

Stock Indices have neutralized their daily uptrends with the NQ-100 turning its daily trend down.  It would take a daily close below 4527/ESU for the S+P 500 to do the same.  Just as important, stock indexes would need to close below their Aug 1 – 3 trading ranges, on any day after Aug 3, to turn their intra-month trends down and confirm multi-week peaks.

The DJIA spiked higher on Aug 1/2 – fulfilling a ~1.5-month low-high-high-(high) Cycle Progression and a series of ~3-month (90-degree) moves from successive highs on Nov 1/2, Feb 1 & May 1, ’23.  It also needs the intra-month trend to turn down, in order to validate that as an intermediate peak.”


Stock indexes are fulfilling ongoing analysis for multi-month peaks to take hold in late-July/early-Aug ’23 and quickly enter a very vulnerable period.  As it did in Nov ’21, the Russell 2000 could be leading this transition as it fulfilled multi-month upside targets while maintaining its intra-year down/neutral trend status – setting the stage for a new multi-month decline.

It also peaked right at is converging monthly 21 & 40 High MACs – the upper ranges for its 3 – 6 month and 6 – 12 month trading ranges… providing many of the ‘ideal’ criteria for a major ‘B’ wave rally to peak.  An initial decline should take it lower into the second half of Aug ’23. A subsequent bounce into mid-Sept ’23 would then usher in a second, more significant ‘danger period’.

 

Is The Russell 2000 the ‘Canary in the Coal Mine’… or Just an Outlier?

What is the significance of Monthly 21 & 40 High MACs being tested and held?

Is this a ‘Major ‘B’ Wave Peak’ in at least one key index??

 

Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.