Just a quick note this evening.
A preliminary Monthly Chart Sell Signal was triggered in the Russell 2000 Index today by my computer trading system (see chart below). This signal will not become official until July 31st. A rebound in the Russell 2000 Index between now and then could possibly abort this signal, but given my recent warnings in this column, I wanted to provide this special update to all readers.
The last monthly chart sell signal in this popular small-cap benchmark index came in July 2007. The exact top for the Russell Index was posted in that same month, and the correction that followed was 60%! While I am not forecasting a 60% correction right now, I do think we are now in a bear market and that the Russell 2000 Index will correct at least 30%. And the S&P 500 Index can be expected to correct at least 20%.
Preliminary monthly chart sell signals were also triggered today in the following stocks: ALL, FL, JNJ, MO, SNDK, and YUM, among others.
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| Russell 2000 Index Monthly Chart with Computer-generated Buy & Sell Signals |
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