**trading Alert: Russell 2000 Breaking Out***

Quote from michaelscott:
You can make your own chart. The R2K is resting at a key trend line right now and, as I pointed out earlier, a key area. There is no room for it to go down from here. None.
If it does go down further from here, then we are sunk.
If it bounces, then that is a hugely bullish sign.
I checked the put/call ratios/ISEE#s. Lots of puts and short interest taken out today.
If the price bounces off of the trend line, then we'll go higher.
What is that formation at the top? It looks like to me a reverse head and shoulders.
If we can bounce, then we stand a good chance at breaking out. If we move lower, then we are in trouble.
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Great, GREAT analysis. Let's move to Fundamentals, shall we ?
Dow at all time highs. These are stocks in a "monopoly" position with low debt and high cash balances. This is MUCH DIFFERENT than Russell 2000 stocks which are mostly highly leveraged and very susceptible to higher interest rates.....Bernanke and Company HAVE BEEN SHREWD up till now......they are not showing their "HAND". But, the key is: INTEREST RATES MUST GO HIGHER (This is their hand they are NOT showing !). One might ask, why ?
Answer: HELLO ! The US Dollar must get stronger or else we'll be in the land of Argentinian Inflation ! 20%+ !
My gosh, the cost of everything from gasoline to paint to food is increasing at double-digit annual rates (ignore the tainted govt reports for now) And, this is key: wages are not increasing.....at all. Bottomline: super-squeeze for the consumer. Check out the latest report from Circuit City: no one is buying that hi-tech "stuff".....they've run out of money.....errr....discretionary income as the PhD's would say.

Buh-Bye RUT...see you in the 700's.
 
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