Chart Book | Chart of the day: Russell 2000 Index has its head in the clouds

Don't be overwhelmed by the wealth of classic technical analysis signals that leap out from this weekly chart of the Russell Index of the top 2,000 US firms. All offer something important as a takeaway, though the most salient is the shift from a steady rally, supported by the trend line since 2009, to a broadly sideways move since 2014 around a central rate of 1,150 points. Whether investors choose to define this as a broadening top or a rectangle pattern with extensions just outside it, it is the small shooting-star-cum-bearish-engulfing-candle that they need to take note of. It suggests a drop to 1,120 to 1,150 where a thin cloud lies. Beyond that could easily be a move lower still.