The main feature of the RUT chart that concerns me at the moment, is apparent when looking at the long term, monthly chart of the index. The reversal that began on the first trading day of September, occurred when price had got very close to the upper boundary of the trend channel drawn off the 1990 and 2009 lows, with the upper boundary drawn off the dot com peak. That level coincides with the 2.618 extension of the GFC high to low.
Zooming in to the weekly, we can see that divergence is present, adding weight to the evidence that the August highs could mark an intermediate term top at least. The trend off the 2016 low looks to have broken (solid red line), although it could easily be argued that the dotted red line drawn off the first reaction low, may be the more appropriately drawn trend. Both in my opinion should be monitored for now until more information is present.
Also, the extended blue lines from the broadening pattern from the move that developed throughout 2014 - 2016, currently around 1,550 is another key area to watch. Should price fall through this level, the move over the past year since price broke above the upper boundary, should then be viewed as a failed breakout.
As for the more immediate future, it may have already reached the first area of support. In yesterday's trading price almost touched the January high and also the June low which formed the bottom of the pennant that very clearly failed on Monday.
This outlook, given the recent move, tells me we should be in defensive mode for now and manage risk in an appropriate manner. Many are already calling the beginning of a bear market, prematurely in my opinion. However, we do have some clear levels to watch and should allow price to tell us what to do next.