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Russell 2000 Daily Chart with Current Implied Volatility Band Levels for Jan. 12, 2015

01-12-15 RUT Daily Chart

Buyers were unable to defend recent gains following the release of Friday's Non-Farm Payroll (NFP) Report. A "sell the news" reaction should not have surprised as the oversold reflexive rebound from Jan. 6 low lacked validating volume even though prices ascended above layers of moving average resistance.

RUT has now returned within these layers and testing the upper boundary of an unfilled opening gap as well. The ability to retain these layers of support (former resistance) is critical for a durable bullish trend reversal. Otherwise, last week's two session rebound was nothing more than a "dead cat bounce" with a test of lower lows ahead.

As prices are expected to return to normal intraday price movements, our published price tables should be more reliable this week. As always monitor market breadth very carefully. Only consider entries (buy and sell) if internals are not at extreme levels.

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