The Russelll 2000 Index is halfway back to 1,750 after falling from there to 1,300 (25.7%) since the August highs. Yesterday I expressed my misgivings about the recent low-volume rally and it's easy enough to manipulate the Dow, with just 30 stocks, the Nasdaq, with just 100 stocks and even the S&P 500 has half it's market cap in the top 30 stocks so it only takes a bit of firepower aimed at the leaders to prop up the markets so unscrupulous people can pretend things are better than they are.
Not so much the Russell, with it's 2,000 small-cap stocks, which are more evenly distributed throughout the index or even the NYSE, with it's 2,800 companies that trade 1.8Bn times a day – those are VERY EXPENSIVE to manipulate but, the good news is that they generally follow the other 3 so manipulating the Big 3 usually leads to the NYSE and Russell following suit.
Still, when we get to major inflection points, it's often the NYSE or the Russell that warn us that things may not be quite as they seem. The NYSE topped out at 13,600 last January but then plunged 10% in two days and never regained its highs in the Summer, which is one of the things that kept us cautious while the rest of the indexes were making records. In December, the low for the NYSE was 10,723 but we'll call the support line 11,000 and that's a 2,600-point fall (19%) and now we're back to test the 50 dma at 12,500 after a 13.5% rally, 2/3 of the way back to the top.