Russel 2000: more downside potential?Objective? The lower range of the Bollinger bands or the Linear regression channel pattern?
A bearish trend is applicable below 2100.
Crossing above this level will negate the bearish stance.
Downside price potential supports the bearish trend.
RSI leaves enough room for further downside price potential.
MACD bearish crossover applicable.
US2000 trade ideas
RUT 3/20/22Russell 2000
RUT chart paints one of the best and clear pictures of where our economy stands.
Since topping out in Sept. ’18, RUT broke the trend and went into a sideways market.
In Nov.’20, price broke out of sideways range and continued uptrend.
At breakout price of 1708, price continued uptrend and topped out at 2355.
From there price broke down and close beneath 50ema in May ‘21. This ended the uptrend and sent price into a sideways range.
Price started to range between low of 2100 to high of 2350
Early Nov.’21 break broke out and upwards out of this range in what looked to be the start of new uptrend.
By the end of Nov.’21, price couldn’t hold support and fell back into range. The breakout is now deemed a “False Breakout”.
As price fell back into range, it found itself unable to break and close above 50 and 200 ema.
In Jan.’22, Price broke down from range. This breakdown now signaled a possible start of new downtrend.
Price continued its move downwards and bounced at 1920 area. During this time, we also saw a Death cross between 50 and 200 ema. This cross further confirmed the bearish conditions in the market.
After the breakdown, price pulled back to previous support @ 2100 and bounces off it turning previous support into resistance.
Currently, we are at support turned resistance level after breakdown of range.
The market broke down from this sideways range and we can now label it a “Distribution Stage”.
The Stochastic currently sits at 100, showing us the market is current completely “over-bought”.
The MACD is also under 0 in bearish territory.
We are entering a downtrend and couldn’t be at a better place to enter the market to short.
This is an ideal time to find short set-ups in the stock market.
RUT Russell 2000 Support and ResistanceRUT Russell 2000 bounced from the strong support of $1940 and is heading to the $2180 resistance.
I also think we might see the end of the war soon.
Russia says the first phase of its “military operation” in Ukraine is mostly complete.
Looking forward to read your opinion about it.
RUSSELL2000:FUNDAMENTAL NEWS+NEXT TARGET | LONG SETUPRUSSELL 2000 FORECAST:
The Russell 2000 tumbles as U.S. inflation rises at the fastest pace since 1982
Lack of progress in peace negotiations between Russia and Ukraine also weighs on sentiment, accelerating the sell-off on Wall Street
The Russell 2000 near-term outlook remains bearish from a technical perspective
The Russell 2000 fell Thursday in midday trading, sinking about 1.3% to 1,990, weighed down by risk-averse mood due to rising geopolitical tensions and rampant inflation in the United States. Investor sentiment improved briefly yesterday on expectations that the crisis between Russia and Ukraine could begin to de-escalate soon, but the winds shifted again today after high-level talks between the two countries' foreign ministers failed to produce any progress towards a ceasefire.
To make matters worse, U.S. CPI continued to accelerate and reached 7.9% year-on-year in February, its highest level since 1982, driven by rising fuel, food and housing costs.The commodity market price shock of the past few days did not influence data for this period, so we can effectively say that inflation has not yet peaked, and that much higher readings are likely in the coming months.
Mounting price pressures will lead the Fed to raise interest rates multiple times in 2022, starting at next week's meeting, although the hiking cycle may be less aggressive than anticipated earlier in the year amid extraordinary uncertainty stemming from the military conflict in Eastern Europe. In any case, the direction of travel is toward less accommodation and tighter financial conditions over the forecast horizon.
The transition to a more restrictive monetary policy environment, coupled with weakening activity, runaway inflation, and the war in Ukraine, will ensure that volatility remains elevated for the foreseeable future, complicating the equity market recovery, particularly for cyclically oriented companies that are highly dependent on healthy GDP growth. This leaves the economically sensitive Russell 2000 in a precarious situation and vulnerable to near-term weakness.
From a price action perspective, the outlook is bleak for the Russell 2000. Looking at the daily chart, we can see that the index is currently trading below its 200-day, 100-day and 50-day simple moving averages, and has been making lower highs and lower lows in recent months, two bearish signals that reinforce the argument that the path of least resistance is south.
In this regard, if the small and mid-cap stock benchmark stays on a downward trajectory, bears may attempt to launch on assault on 1,890/1,895. This technical support, defined by the 38.2% Fibonacci retracement of the 2020/2021 rally, has been tested twice in recent weeks, successfully repelling sellers each time. Should it be tested again, we may see a bounce from these levels, but if the floor breached, all bets are off, with a breakout exposing the 1,815 region.
On the flip side, if buyers return and bid price higher, resistance is seen near the 2,065 area, where the March high aligns with the 50-day SMA and a descending trendline in play since November last year. If bulls manage to push the index above this barrier, the next upside focus appears at 2,105 (February high). A sustained move above 2,105 and monthly higher high is required to resuscitate buying momentum and improve the near-term outlook.
Russell 2000-the next target is 1700.As we can see, the price has broken through the important support line of 2100 and has not been able to return back for more than two months. Then, we will consider this a confirmation of the truth of this breakdown. Now, let's pay attention to the wave structure. The falls occurred in the form of a pulse wave (1-2-3-4-5). This means that despite a slight consolidation, the downward movement will continue to the next support level of 1700.
Quiz..?A quiz is usually a short test and often doesn't have a huge impact on your grades as a test has. But this one could have a huge impact on your portfolio..!
I provide the chart and the cheat sheet.
For more help you can look at my previous analysis as well:
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Write your answer in the comment section
Best,
Dr. Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
Russell 2000, The Weakest LinkFolks, Inflation affects small companies more than the large-cap stocks. Capitalism supports the survival of the fittest businesses. Many large-cap companies can dominate the smaller competitors in a rising price environment as inflation is a more significant threat for companies with less capital. Rising interest rates that increase financing and debt servicing costs also weigh on profit margins. Inflation can be a damaging beast for the small-cap arena.
let me know about your thoughts on Russell 2000, Compared to S&P 500 will it fall much harder during the economic hardship cycle?
Not financial advice.
What is going on in Small Caps?After successfully predicting a 10-15% decline in Russell 2000 now we need to look at it once again..!
I think the top of the orange box could be a strong resistance level and the relief rally will be ended there..!
Also, this could be the SOW part of Wyckoff model:
Best,
Dr. Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
Russell 2000: FUNDAMENTAL + NEWS INFOs | LONG SETUPRUSSELL 2000 FORECAST:
The Russell 2000 tumbles as U.S. inflation rises at the fastest pace since 1982
Lack of progress in peace negotiations between Russia and Ukraine also weighs on sentiment, accelerating the sell-off on Wall Street
The Russell 2000 near-term outlook remains bearish from a technical perspective
The Russell 2000 fell Thursday in midday trading, sinking about 1.3% to 1,990, weighed down by risk-averse mood due to rising geopolitical tensions and rampant inflation in the United States. Investor sentiment improved briefly yesterday on expectations that the crisis between Russia and Ukraine could begin to de-escalate soon, but the winds shifted again today after high-level talks between the two countries' foreign ministers failed to produce any progress towards a ceasefire.
To make matters worse, U.S. CPI continued to accelerate and reached 7.9% year-on-year in February, its highest level since 1982, driven by rising fuel, food and housing costs.The commodity market price shock of the past few days did not influence data for this period, so we can effectively say that inflation has not yet peaked, and that much higher readings are likely in the coming months.
Mounting price pressures will lead the Fed to raise interest rates multiple times in 2022, starting at next week's meeting, although the hiking cycle may be less aggressive than anticipated earlier in the year amid extraordinary uncertainty stemming from the military conflict in Eastern Europe. In any case, the direction of travel is toward less accommodation and tighter financial conditions over the forecast horizon.
The transition to a more restrictive monetary policy environment, coupled with weakening activity, runaway inflation, and the war in Ukraine, will ensure that volatility remains elevated for the foreseeable future, complicating the equity market recovery, particularly for cyclically oriented companies that are highly dependent on healthy GDP growth. This leaves the economically sensitive Russell 2000 in a precarious situation and vulnerable to near-term weakness.
US2000 is on bullish momentum! | 9th March 2022Prices are on bullish momentum. We se the potential for a bounce from our buy entry at 1924.02 in line with 78.6% Fibonacci retracement towards our Take Profit at 2078.79 in line with 78.6% Fibonacci Projection. Our bullish bias is further supported by RSI depicting bullish momentum.
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