William Meade's  Instablog

An almost perfect Fibonacci Retracement in the Russell 2000 index occurred today, signaling that the rally in small caps is over for at least the time being.  Taking the 2008 high of 764.38 in the Russell 2000 on August 11th, and subtracting it from the March 9th low in 2009 of 342.59 equals 421.79. If you multilpy 421.79 times the first fibonacci retracement amount of 38% or .38 that equals 160.28. added to the March 9th low of 342.59 equals 502.8.  Which is almost exactly equal to the high in the Russell 2000 today of 501.46.

For more technical evidence two other crucial signals happened today in the Russell 2000. First off the Russell 2000 went through a key pyschological level of 500 and that closed below it. Key pyschological round numbers such as 500 are targets and when an index hits a key level and then closes below it is almost always a bearish sign.

Secondly there was technical divergence in the equity indicies today another crucial signal of a market top.  You have both Nasdaq Indices, the Composite and the Nasdaq 100 ending in positive territory for the day, while the Dow S&P 500 and the Russell all closed down.

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