RUT 2K 40 DMA % Index crosses below 20 DMA..

The Russell 2000 40 DMA % Index crossed below it 20 day moving average.  This has been a good sell signal during this bull run.   The  40 DMA % Index is the percentage of stocks with closes above their 40 day moving average.  Yesterday the Russell 2000 index had 77.5% of its stocks above the 40 DMA.  Today the index moved to 70% a drop of 7%.  The softening of the Russell 2000 fore-tells of more selling to come.  A 2nd day confirmation predicts a 3 to 5 % sell off.

The NYSE and NAZ Composite which are also tracked are still above their 20 day moving average trigger line but have significantly lost momentum and could trigger on weakness as early as tomorrow.

This entry was posted on January 12, 2010 at 10:32 pm and is filed under 40 DMA % Index. You can follow any responses to this entry through the RSS 2.0 feed.