$RUT Analysis for 01.01.2008

RUSSELL 2000 INDEX - $RUT

Monthly chart shows the June 2007 high was made with divergence in the cci momentum indicator. December's trading activity resulted in a doji candle pattern, indicating indecision between the bulls and the bears. January's trading activity should indicate which direction the index is headed. The Russell 2000 index ended the month of December with a close below its 8ema and below a prior high made in May 2006.

Weekly chart better shows how the index ended for the 2007 year. The index remains in a consolidation range since August 2007. The last 2 weeks of 2007 indicated the bears gaining on the bulls. Look for a test of the August 2007 low, and then a break of support and lower.

Daily chart shows index to be below all its key moving averages. While bulls enthusiastically bought in the 3rd week of December, they were overcome by bears, who quickly erased any gains the bulls made. Look for continued weakness next week.