Sunday, May 18, 2014

Russell 2000 Breaking Down

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The Russell 2000 closed at multi-week lows on its highest weekly volume in over a year.
View the weekly price chart here

Even a casual glance at the volume trend shows the Russell 2000 has been undergoing some very serious distribution in recent weeks.  For chart technicians, this index is just a few cents away from confirming a neckline break of a head & shoulders pattern.

At this moment the Russell 2000 appears to be breaking down.  Should the selling pressure persist, I would expect further downside in the range of 7%-10% in the coming weeks.