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Hugo in HTO Trading,

RUSSELL 2000: Being squeezed between the 10 and 50 week moving averages

Since the beginning of the year the index fell more than 1.5% however last week plunged more than 1.0% and made a phase change, going from an accumulation to a recovery phase.

Last week the index fell with a wide range and closed in the middle of the weekly range, however managed to close below previous week low, suggesting a bearish momentum.

The Stochastic is showing an extreme overbought market and is beginning to show signs of bearish momentum although is still above the 50 mid line.

Expecting a downward move to a weekly support at 1,038 (scenario 1) on a break below the previous week close at 1,114 however a bounce off the weekly support at 1,078 may push the index up to a key level at 1129 (scenario 2).