A Superb Spike Top in the RUT But…

When several charts of the Russell 2000 are examined in conjunction an interesting picture emerges.

First, there’s the 30-minute chart that shows rather well the Bear Pennant that has been building since this small cap index’s 50 DMA dance at the beginning of the month along with the fact that this pattern is trying hard to confirm super safely at 818 for a target of 785 well below the RUT’s 50 DMA at this point.

Then there’s the 1-month daily chart that shows what appears to be a possibly spectacular Spike Top as ugly as it is and what makes up the potential apex of that Bear Pennant shown above and below.

This Spike Top has been flirting with confirmation for two days now and that occurs at 829 for a target of about 815 and a level that will more than confirm the Bear Pennant for its target of 785.Interestingly, the case could even be made for the founding, but not favorite, pattern of Peak Theories Research and that is, of course, the Double Top and a rather misshapen one in this possible case.

It shows itself in the one year chart below as does an interesting dilemma but one that does not present particularly well with that possible Double Top and Rising Wedge and that is the question: top to what?

Yes, you can make the case that the Russell 2000’s Spike Top is the top to its Bear Pennant and its Rising Wedge that confirms on that pattern’s target of 785 for its own target of 602, but in the context of the one year chart, it’s only an attempt on a top relative to last year’s actual tops.Perhaps this means the Russell 2000 might fulfill that Spike Top but not the Bear Pennant to go on to put in a real top near or above 870 before potentially fulfilling its Rising Wedge or simply climbing higher.After all, the Russell 2000’s near-term uptrend remains intact due to its consolidation of February and this possibility should be considered.

However, when the three year chart is brought in, it reminds us of that big H&S in small cap with what may be a nice top to its right shoulder.

Should this turn out to be true and it may not for reasons discussed above, it seems that that there is a superb Spike Top in the RUT without that potential but.