The Russell 2000

Let's assume the Russell 2000 is a proxy for investors stock market risk tolerance. Here is a chart of the IWM's -- the ETF for the Russell 2000. Notice the ETF is trading just below the 200 day SMA and has been for awhile. Trading below the 200 day SMA is usually considered to be the sign of a bear market. While there has not been major downward movement, the index has not moved higher either. In addition, the short-term SMAs are below the longer-term SMAs -- another bearish sign.

Short version -- we're seeing consolidation just below the 200 day SMA. The markets are waiting for a signal to move one way or the other