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Nov 15th, 2009: Russel 2000 Still Correcting

Posted by pugsma on November 15, 2009

As it did for the 2-month period from Mid-May to Mid-July, the Russel-2000 small cap index is in another 2 month corrective mode from late Sept to late Nov.  I would expect the Russel-2000 to hit the a target of about 550 to 560 in the next couple weeks for the e-leg down.  Then there should be a 5 wave up move to new highs into early 2010. 

The really interesting thing about the Russel 2000 is that it has started to predict weakness in the market almost 1 month ahead of the SP-500 weakness.  In the May to July period the SP-500 peaked during the b-leg of the Russel-2000 corrective and the SP-500 bottomed in a c-leg corrective during the e-leg of the Russel-2000.  So far in Sept-Nov period the SP-500 peaked during the b-leg of the Russel-2000 corrective and if the next 2 weeks play out as predicted the SP-500 will bottom on a c-leg during the Russel-2000 e-leg down. 

This why I believe the primary count (in green) on the SP-500 is the right count.  The SP-500 is set to begin a c-leg down to finish off the large corrective for wave [4].

Russel 2000 Daily Chart:

SP-500 Daily Chart:

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