Time for a SWING!!!!
This is a daily chart of the Russell 2000 with Standard Deviation bands overlayed. I have used the 90 day and 2 Standard Deviation pattern settings. There is no magic to that, you can use different time periods and different deviations. The whole general idea is that is measures moves that are extended and due for a reversion to the mean. In this case you can see where we have touched the bands on the high side, in every instance we have had a short term pullback. Some have been large moves and some small, but all of them have had them. There were a couple of instances where once we hit them we kept going for a short time similar to what we have now. Even in those cases we did have dips after a few days past the bands like we have now.
In my world when I combine this with the VIX sell pattern for stocks that is still there that I posted a few days ago, this tells me it is now time to try and counter trend trade this market. I sell on breaks and buy rallies once my setups are in place, so in this case I will be looking to short a break if it occurs now starting tommorrow. There seem to be sell signals in several markets for tommorrow if we go down, so it is confirmed to me that we are in a short term overbought zone.
I doubt we are done with this upward move overall, but the one thing that is always lurking in these light volume moves, is the possible heavy volume down move that catches the PPT by surprise. Recently we have seen one about a month ago, but they were able to contain it pretty easily. Although there is very little correlation day in day out between volume and price, history has shown that upward moves like this on light volume have not lasted in general.
In all honesty fading this move as many have done would have been a disaster, and I have not done it yet. I do think now is the time to take a shot at it knowing that it is probably not a really high probability trade. However, I do have a new pattern I am starting to use that is in place now for a decline if the market breaks here. Since I have not used it much in live trading, I am anxious to see how it holds up in real time.
I will post the trade here in the Russell if I get filled, I have the orders working right now.