Russell 2000 – Weekly Analysis

CANDLES

I’ve been reviewing Russell’s signals for three days and still don’t have an ironclad conclusion on several conflicting indications. Here is the current read.

The 10-day frame closed on Friday with a candle that technically confirmed a bearish Harami reversal. However, the close was just slightly above the 8 EMA, and this is consistent across other RUT-tracking instruments. That positioning is not particularly convincing for bears.

On the weekly frame, the index almost formed a Three Black Crows pattern—almost. It is missing one criterion. The setup is very similar to the TBC that Nasdaq printed in February 2025, but not identical.

The 3-day frame printed an Inside candle on Thursday, a strong sign of a potential reversal higher. Friday’s move, which started the next candle, followed a very typical pattern. If it continues higher and completes a Piercing Line or Bullish Engulfing on Tuesday, that would be a strong reversal signal.

On the daily frame, Friday began with the index finding solid support at the 100 DMA. The resulting candle was a Thrusting Line, leaving the overall odds essentially neutral.

Taking all of this into account, I do not see strong bearish odds at this point. Small technical “failures” here and there could become important. Overall, Russell appears close to neutral on the short- and mid-term, with a slight bearish tilt, and I would prefer to see how momentum develops over the next two days. This tug-of-war is not over.

ELLIOTT WAVES

Mid Term

At this point, I am not ready to switch the primary direction (green or blue). One interesting observation: the Russell Index and RTY futures printed their ATHs on different days, almost two weeks apart, which fundamentally changes the short-term wave structure. For potentially larger tops, these readings are normally aligned. This could be a secondary indication that the index has not yet completed its advance and that a new ATH may be required to bring the structures into alignment.

Inverse Head & Shoulders

Back on June 9, I highlighted an Inverse Head & Shoulders pattern. On August 10, that structure developed a larger-degree right shoulder. As noted then, “RUT could be looking at the potential for an enormous 30% rally over the next 5–10 months.”

On October 15, Russell reached the midpoint of the first target zone and has been consolidating since, potentially forming another flag. If this hypothesis is confirmed in the next few days, we could see a rally on the order of 15% over the next 2–3 months.

Big Bear Case

I’ve recently revisited the larger correction that Russell began in November 2021. The biggest unknown remains the circled wave: it is clearly corrective and could either be part of a larger corrective structure or part of a diagonal. I have outlined one bullish case in red and two bearish scenarios in green and blue. The blue has the lowest probability, as it would require an impulsive wave down, which has not emerged so far.

The most optimistic scenario is the red path, which assumes that wave IV completed in April as a flat of reverse complexity and that the current advance is an impulse for wave V. The green path is the most concerning, as there is no clear marker for the potential size of wave 4. We will keep these scenarios in mind while RUT sorts out the momentum next week.

Summary:

Russell’s long-term posture remains decisively bullish. Since the beginning of November, the index has been weak, as we noted in the monthly report. At the same time, it has not yet built very strong bearish momentum. Small technical failures, incomplete signals, wave misalignment, and intact major supports all prevent me from turning strongly bearish on the index.

Next week could become a turning point on the short-term frames, and the completion of the 15D on Friday, November 21 will likely define the fate of the monthly close, with a potential impact on the long-term perspective. Bears need to be a bit more decisive if they want to succeed.

Happy Trading!