Indexes: Breakout or Pullback

I dropped a green line on RTY. I'm not sure I want it there, but I put it there for comparison purposes. Nasdaq reversed at that line, and that's the one I place the most weight on. The Nasdaq is still the more important index because it is leading the rally.

A breakout above that line is the more important event because it will cause more short covering. A pullback is a normal test, and I'll be looking to buy the dip.

Having said that, now is the time to start hunting for new short targets. I will be looking top down, from macro trades in FX, bonds and commodities down to sectors and then individual targets. VIX will hopefully return to April levels, providing cheap puts.