I've been very bullish these past few weeks believing that the R2K would break through its resistance and follow the DJIA. However, it appears what is happening now is that the R2K is forming a head and shoulders starting from 4/12. My belief is there will be a bounce from here, but the next peak at around 835 should be watched carefully and the inverse fund for the R2k should be bought at that level. The target price of any fall from the third peak would make the index tank down to the 795 area or approximately a 50% retracement of the small cup formed by the February correction. Interestingly enough, the ten year yield appears to be funneled into this massive symetrical triangle starting from the summer of 2006 with the price now sitting in the apex. Any break above 4.75 could trigger a massive move to the upside in interest rates. Similiarly any move down could also trigger a massive move to the downside. I dont think we are going to get any help from Bernanke so downside is limited on the ten year yield and can only assume that the move will be to the upside. Unless there is this sudden rush to buy bonds, the interest rates are heading up. I figure there will be a move to the upside on the russell2k followed in the next few days and then the ultimate test will begin.