Here is a Great Graphic of the Russell 2000, created on Bloomberg. After a big advance it appears to have carved out a topping pattern of sorts. It could be a head and shoulders top or some other kind of triple top.
The importance of such technical patterns is in the measuring objective it implies. It warns of potential of another 4%-5% decline toward 1000-1020.
The 38.2% retracment objective of the rally since November 2012 is found just above the measuring objective at 1041-1042. The 50% retracement is just below 989. There have been bearish divergences in the weekly RSIs for the entire year, so may not be significant that it has now fallen to three-year lows. The MACDs also show this bearish divergence this year and it too is at three-year lows.
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