One of the 'targets' I've had my eye on in the market has been the Russell 2000, a small cap stock index comprised of the smallest 2000 companies in the Russell 3000 index.
In there you find a diversity of sectors and such companies as Starwood Property Trust, Alaska Air Group, and Alkermes.
The reason I've been tracking this index carefully, along with junk bonds, is that the small companies usually give you an advance heads-up on trouble soon headed for the larger cap companies and stock indexes.
It's just an application of our Outside-In rule. Always keep your eye on the weaker periphery players if you want to be a step ahead of what's coming to the center.
The Russell 2000, or RUT as it's called, is looking especially weak here.
It double-topped in March and July, and then made a lower high as it failed to recapture and then exceed those prior tops.:
Worse, the 50 and the 200 day moving averages have crossed (circled in green) which in charting jargon is called a 'death cross' — as that's usually a reliable signal that more selling is on the way. The RUT is the first of the major averages here to sport a death cross, which is why we watch it closely.
Of course, as everybody and their uncle knows, the markets are long overdue for even a minor sort of correction. So finding a bit of RUT weakness here is not necessarily such a big deal.
by davefairtex 
