Head & Shoulders in Russell2000

Over the last few weeks I’ve been getting an unusual amount of emails about a head and shoulders pattern in the small-cap Russell2000 Index. I think today is as good a time as ever to address this possibility.
First of all, the Russell2000 has to be considered to be in an uptrend until it starts to make lower lows. We don’t have that yet. But here is the daily chart showing what some chart readers might call a potential head and shoulders topping pattern. I want to reiterate that this is just a potential pattern since confirmation does not come until the neckline is broken.

We can see the shape of this formation taking place with the left shoulder in January, Head in March and the “right shoulder” is being put in as we speak. All of this is only worth discussing at a cocktail party, and there’s no reason to act on it until the neckline around 1080 is broken.  (more)

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