Russell 2000 – Weekly Analysis
Following our forecast, the Russell 2000 recorded another strong bearish move this week. Today, we assess the consequences and the most probable paths forward.
In this review, we analyze the index through candlestick structure, trend behavior, momentum dynamics, and Elliott Wave context to determine the most likely scenarios and highlight the key levels that could shape the next major directional move.
CANDLES
This week, the index continued to solidify short- and mid-term bearish odds. RUT confirmed losses of the 100-day MA and the 20-week EMA supports. Thursday’s close of the 24-day frame, which is larger than the monthly, with a Bearish Engulfing was particularly telling—suggesting lower prices over at least the next 3–5 weeks.
The technical backdrop is quickly turning bearish, and if bulls fail to step up in the second half of March, the index has a good chance of forming a Tower Top on the monthly frame.
Overall, the Russell remains bearish in the short and mid term unless proven otherwise.
ELLIOTT WAVES
Last week, I discussed the high complexity of the recent waves in Russell and decided to zoom out to a broader picture in an attempt to better evaluate the prospects.
As shown on the chart below, two paths appear most probable. The green scenario assumes that wave IV ended in 2023 and that the index has been forming a diagonal since then. This potential diagonal could either be an ending one for wave V or a leading diagonal for an impulse of a higher degree.
Another option on the table is the red path, which assumes a large and very complex wave IV that began in 2021. In this case, waves A and B have already been completed, and the index is currently developing wave C of IV.
Under either scenario, there is still ample room for the current move down to continue, potentially developing as a motive wave and possibly taking the form of an ending diagonal.
Since Elliott Wave signals tend to be less reliable on the micro level, we will continue to rely on other technical tools as the pattern evolves—primarily candlestick signals—while keeping the long-term targets on the larger chart in mind.
Summary:
Russell 2000 continued to build a bearish setup this week after confirming the loss of the 100-day MA and the 20-week EMA supports. The 24-day frame closed with a Bearish Engulfing, suggesting elevated odds of further downside over the next several weeks. If bulls fail to regain momentum in the second half of March, the index could form a Tower Top on the monthly frame.
From a broader perspective, the index remains in a highly complex structure with two main scenarios on the chart, and both leave room for the current decline to continue.
Overall, Russell remains bearish in the short and mid term unless clear reversal signals appear.
