Hedgeye CEO Keith McCullough noted in today’s Morning Newsletter: “The Russell 2000 bounced on no-volume to yet another lower-high of 1114 yesterday and at -4.3% YTD, the Russell 2000 is still bearish on both our immediate-term TRADE and intermediate-term TREND durations.” But we wanted to know what you think.
Today’s poll question was: What's the next stop for the Russell 2000?
At the time of this post, 72% said the next stop would be 1000; 28% said it would be 1200.
Those who believe it will drop to 1000 say it’s “the next area of support.” One voter explained, “$RUT has been the gift that keeps on giving if you're on the put side. It's entering bear market territory and once that happens... swoosh!”
Additionally, as another voter said, “The last leg up in Feb felt blow-off which usually means a larger drawdown is coming. Also, leverage gets risky and expensive if the market isn't making higher highs and the longer IWM sells off the more pressure is put on the S&P. I'm thinking at least support at $1050.”
In the opposite camp, voters who chose 1200 said:
- “Don’t think it hits either 1000 or 1200 in next few months but down 9% from high with SPX near all-time high, the easy trade is RUT trades lower but Mr. Market likes to penalize the easy trade...so higher.”
- “Shorting the $RUT seems like a too-obvious trade now. Wouldn't be surprise, it squeezes higher and traps more people before turning lower again.”
- “Been down so long it looks like up to me.”