|The Russell 2000 has breached its July lows and this index is now "setup" in what could play out as an IBD style double bottom base chart formation. The Russell 2000 daily and weekly time frames are both in oversold conditions. At the same time, its monthly time frame is coming off overbought levels, but nowhere near oversold levels.|
It should be noted the Russell 2000 volatility index (http://scharts.co/1vdirA0) peaked today at 22.69, below the July peak of 23.43. Should this divergence hold in the volatility index, look for an end to the selling in short order. In the meantime, look for cups and and areas of support to form around the current price levels.