I’ve been watching the NYSE and the Russell 2000 closely because they have led the market higher over the past four years. Both indexes have remained in rising trend channels despite the overall market weakness. Despite some consternation about the Bear Market coming back to life, until the rising trend lines broke on the leading indexes, there was little point in predicting the return of the Grizzly.
Well, the Bear growled last week. While the NYSE is still hanging on at support, the Russell 2000 just crossed the line into Hurtville.
While a rally back to test the bottom of the trendline at 700 is a possibility, a reasonable downside target resides around 640. It’s time to assume the worst, not the best, for most stocks.
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