While both the S&P 500 and DJI has made new all time highs lately, the broader Russell 2000 has not even been close to its March 2014 to at 1,212.82.
As can be seen on the weekly chart above, it broke below the support line from November 2013 and is currently back-kissing this former support line, which now acts as resistance. At the same time a S/H/S top could be building. To confirm the top-formation we need a break below the neckline support at 1,082.53 until then this potential top-formation is nothing more than just a potential top-formation.
If we zoom in on the minor rally from 1,082.53 we likely need one last rally to just above 1,179.84 to end wave B and the possible right shoulder. Short term a break below 1,144.10 will be the first warning, that the top could be in place, while a break below 1,118.66 is needed to confirm the top for a test of the neckline support at 1,082.53.
The strong divergence between the Russell 2000 and both the S&P 500 and DJI, should be taken as yet another warning, that a long term top could be close by.
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