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Chart Analysis: Russell 2000 bull trap

CMC Markets

Even with the S&P and NASDAQ hitting new highs today, the Russell continues to struggle technically. In the morning it looked ready to break out and stage a big catch up rally but that fizzled out, leaving it stuck from a head fake/bull trap 50 points short of its July high. Instead, depending on how the day turns out, it looks like we might end up with a failed breakout with 1,165 resistance holding and either a gravestone doji or a shooting star, both bearish candles that suggest upward momentum may be nearing exhaustion. If it can muster up more support and break 1,170, it could still take a run at 1,190 or even 1,210 resistance but a failure here would suggest it could potentially retest recent lows near 1,130 or even 1,110.

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