Russell 2000 – Weekly Analysis
This week’s Russell setup sits at a critical crossroads, with multiple signals quietly lining up beneath the surface. Candlesticks, trend alignment, Elliott Wave structure, and momentum are all converging toward levels that could define the next phase. We will zoom in on what matters most—and then step back to see where the larger structure is taking shape.
CANDLES
From a candlestick perspective, Russell sits between the bullish Dow and the bearish Nasdaq, leaning closer to the bullish side. After printing a new ATH this week, it formed a Bearish Engulfing on Friday, which is still unconfirmed. The weekly closed with a green candle, but there is a risk that the last three candles could evolve into an Advance Block, contingent on strong bearish confirmation next week.
Tomorrow, we are facing a rare technical event that I will refer to as a Candle Parade. Much like a Planet Parade in astronomy—when several planets align along the same arc of the sky—a Candle Parade occurs when multiple candlestick time frames close simultaneously, with independent cycles converging into a single decision point. In this case, the 1-, 2-, 3-, 5-, 8-, 10-, and 15-day frames all resolve together, compressing a wide range of market perspectives into one moment. Each frame represents an independent rhythm, but when they close in unison, the market delivers an unusually concentrated signal. This setup is rare, technically meaningful, and often decisive. The same alignment is occurring in silver and repeats again on Monday, extending the importance of this window.
Overall, Russell is carrying elevated risk, and Monday will likely reveal the market’s appetite for a larger bearish impact. Even a relatively mild 1% pullback, by Russell standards, could trigger a tectonic shift and flip multiple frames bearish. Monday will be an extremely sensitive and important day.
Short term (daily): bearish, pending confirmation
Mid term: bullish–neutral
Long term (monthly): bullish
ELLIOTT WAVES
Mid Term
The wave climbed to a new ATH and could be technically complete. While it is possible that the entire wave off the April 2025 lows (1–5 in blue) is complete, I tend to think—and some technicals support this hypothesis—that the current peak could be wave 3 (green) of a larger impulse.
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.”
At this point, RUT has advanced 20%, and there is still no confirmed reversal.
Below is the full evolution of the charts since June.
Summary:
Russell bears attempted a strong move by forming a Bearish Engulfing on the daily frame. The move remains unconfirmed, with an elevated risk of confirmation on Monday. Monday is a Candle Parade day for Russell, when multiple 1–15D frames converge into a single decision point, and bears clearly still have a seat at the table.
At this point, the index remains bullish on the long and very long term frames.
Happy Trading!
