Russell 2000 – Weekly Analysis
Should we be concerned about a sharp reversal in the Russell 2000? Has the current rally been as healthy as it appears on the surface — or is something brewing beneath the charts? While the index has shown impressive strength lately, the question remains: is this a sustainable move, or just a setup for a deeper correction?
Let’s take a closer look at the RUT from multiple technical angles — including candlestick patterns, momentum signals, and wave structures — to assess whether this rally has real legs or if it’s time to exercise caution.
CANDLES
After confirming a bottom on the monthly frame, the Russell has been rallying with solid technical backing. Today’s session added to that momentum with a healthy bullish continuation candle on the 15-day chart, further reinforcing the mid-term bullish outlook. The weekly frame also looks strong — and it would take a sharp 4% selloff tomorrow to flip the current setup bearish. Anything less would keep the structure either bullish or neutral-bullish.
On the daily chart, the RUT has climbed decisively above the 200-day moving average and is on track to record a 50/200 DMA golden cross — a classic bullish signal. As it stands, the Russell remains firmly bullish across multiple timeframes. Any meaningful reversal would need to make a clear appearance on at least the weekly frame, if not larger, before a shift to a bearish stance would be justified.
ELLIOTT WAVES
Micro Path
After perfectly hitting the target area, the Russell pulled back as expected — but now appears poised for another move higher. In the latest Weekly Digest, I discussed the potential purple path, which is now gaining technical strength and support. If the current momentum holds, we may see that scenario unfold with increasing probability in the sessions ahead.
Very Long Term
No changes to the long term outlook. Following June’s strong bullish candle closure, we can now tentatively outline targets for the current wave—suggesting that the Russell could add another 11–25% over the next 6–12 months.
Inverse Head & Shoulders
The Inverse Head and Shoulders pattern remains intact.
Summary:
As we outlined in the June monthly review, the Russell has the potential to extend its rally for at least another 1–2 months — and so far, that forecast remains on track.
The index continues to hold a bullish stance, and a meaningful reversal would need to be confirmed on at least the weekly frame. At this point, such a signal is highly unlikely to occur this week.
Happy Trading!
Dow Jones: https://investingangles.com/category/us-indices/dow-jones/
Nasdaq: https://investingangles.com/category/us-indices/nasdaq/
