UPDATE: Russell 2000 Held @ Key Level Highlighted; *Should* Bounce More
We’ve been highlighting the major intermediate-term cluster of Fibonacci Retracement support on the Russell 2000 in the low 1100’s. As we stated in Monday’s ChOTD post, “Watch for a bounce from there or a reversal back above that level.” Yesterday did indeed provide that reversal and bounce.
How far will it bounce? If it is to be any type of meaningful reversal and bounce (let alone another V-bottom) it should at the very least retrace 38.2% of the decline from March. That is approximately the 1141 level. Considering the importance of the level from which it reversed, a 61.8% retracement to about the 1168 level isn’t out of the question…and would not even change the deteriorating intermediate-term picture. We’ll be monitoring this bounce closely.
* Corresponding levels for the $IWM would be 113.25 (38.2) and 116 (61.8).
