RUT in "stuck"? Looking at broader indices like Russell 2000 illuminates bearish potential

Don't get stuck in the rut of looking only at one or two indices. Sure, pay the most attention to the one(s) you're actually trading. But especially when you're finding yourself perplexed by action like the widely-watched Dow pushing new highs when it "doesn't seem to make sense", try looking at other indices. Here a look at the Russell 2000 ($RUT) - now, I'm not guaranteeing it presages that we're inevitably dropping into the abyss tomorrow. But it sure looks more concerning than the narrower Dow Industrials index! On the daily chart below, notice that the $RUT fell under its earlier October lows, and under its 50-day moving average. It's now testing back up to its 50-day MA and Bollinger Band midline. That's an important area of pivot resistance/support (support IF and WHEN it gets back above - but it certainly may need to drop lower first). There are good reasons given the indicators and likely wave count that the $RUT will fall back down again from this resistance. We've got to think that the Russell 2000 already completed its "B" wave top - or at minimum, consider its relative weakness as a negative divergence indicator for equities generally.

What about on the monthly chart, also below? Main thing, it already tested its 50% retrace to its high (at roughly $595) and dropped back from that. So that's a bearish flag on its own, the failure from this key Fibonacci level. Hmmm, may be no wonder it's under that 50-day MA! The other think I thought was funny is, as I looked at this monthly chart tonight, it reminded me of how the Dow Industrials daily chart looks coming up from the March lows! I'm not going to try reading much into it - only that the pattern can break down from that continuation push higher.

When you look at the daily $RUT chart, you see that the RSI-related indicators are testing up to their midlines. That's even the case for a couple of the RSI indicators on the monthly chart. That kind of back-test to the midline is a common test that's associated with the end of a testing-back movement. In this case, for a bear-market rally that's testing for its top. Unless the markets really can draw a "rally rabbit" out of this top hat - I have to remain skeptical. Watching how the Russell 2000 moves should be very helping for judging which way the overall equities markets will go.