But some things need to be paid close attention to in the Russell 2000 for the time being. Volume as it is pushing new highs continues to diminish as can be seen by the grey trendline on the Daily chart, see right hand side below. The price action is going "parabolic" recently that is accompanying this poor volume. This is a recipe for a sharp correction more often than not in my experience. Patterns are "fractal", meaning they appear in all time frames.
Also, the Commercial Traders in the Legacy COT report went NET short 4,952 contracts in the most recent report.
What has not been common the past three years is the position of the commercial traders in all three major equity futures contracts that I follow closely, the large cap S&P 500 consolidated report, the Nasdaq 100 consolidated report, and the small cap Russell 2000 being all NET short in their overall positions.
In the near term picture there was a "Bull Flag" continuation patter on the 30 minute chart on Friday, which saw a failed breakdown (blue oval) and a sharp reversal and breakout to the upside.
But the volume on Friday was poor. How much gas is left in the tank? It appears to be running on vapors.
The next reversal signal that shows up in the Russell 2000 will have me "dipping the toe", with the intention of building a position on continuation patterns that develop. All of this will be shared in with subscribers each day in the service.
(Click on chart to expand)
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There was an error in the initial post and it has been corrected. The Russell 2000 commercials went long in the recent legacy COT report 2,739 contracts, and short 7,691. The net increase in their short position was 4,952 contracts.
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