Russell 2000 – Weekly Analysis
The Russell 2000 is accelerating along the bearish path we outlined, confirming the weakness in small caps and raising the stakes for what comes next.
As downside momentum builds, the index is approaching levels that could define the next major phase — this is where structures either stabilize or start to unwind more aggressively.
In this weekly review, we break down Russell through candlestick structure, trend behavior, momentum dynamics, and Elliott Wave context to identify the most probable scenarios and the key levels that could shape the next directional move.
CANDLES
At the beginning of the week, the Russell 2000 attempted a bounce, but bulls gave up in the final two sessions. As a result, the index printed bearish candles on both the daily and weekly frames.
The weekly has now recorded an 8/20 EMA bearish cross — the last of the major U.S. indices to do so — effectively joining the broader bearish trend.
The outlook for the monthly and quarterly closures is increasingly concerning. The monthly is close to forming a Tower Top, while the quarterly will remain bearish unless the index rallies roughly 6% in the final two days of the month — a tall order.
The technical backdrop continues to deteriorate, reinforcing the bearish outlook. Overall, Russell remains bearish in the short and mid term until proven otherwise.
ELLIOTT WAVES
The index continues to track the two scenarios discussed earlier.
The green path assumes that wave IV completed in 2023, with the index forming a diagonal since then—either an ending diagonal for wave V or a leading diagonal for a higher-degree impulse. The red path, alternatively, treats the structure as a large and complex wave IV that began in 2021, with waves A and B already in place and wave C now unfolding.
In both cases, there is still significant room for the current decline to extend, potentially developing as a motive move or even forming an ending diagonal. Given the lower reliability of Elliott Wave signals on smaller time frames, the focus remains on confirming developments through candlestick behavior and other technical indicators, while keeping the broader structure in view.
Summary:
The Russell 2000 remains under clear bearish pressure, closing the week with continuation signals and tracking toward a Tower Top on the monthly. The technical backdrop continues to deteriorate, pointing to further downside in the short to mid term unless a reversal signal emerges.
From an Elliott Wave perspective, both primary scenarios still allow for additional downside, with the current move likely extending as a motive wave. Given the uncertainty on smaller time frames, the focus remains on candlestick confirmation while keeping the broader structure in view.
