Russell 2000 Overview

The Russell 2000 in its history has allowed us to view its past to determine its future. There have been only three real pinnacle movements to the Russell 2000 Index.

Russell 2000 Index Analysis

In October of 2013 the Russell 2000 would fight to maintain above or below two resistances. From resistance level 1085* - 1198* we can see sideways consolidation with only one major attempts to maintain above resistance 1198* between February and August of 2015. The second attempt followed by staying below resistance 1085* from December of 2015 to March of 2016. With a push in July of 2016 to see higher highs. Shown in Diagram A. 

The Russell 2000 truly came to life with the first run up to break the high of 1296* in June of 2015. With a run up in June of 2016 there is sideways consolidation between resistance 1198* - 1260* in July and November of 2016. This was a precursor to a run up all of November 2016 to test and break the previous high and sustain higher highs. Followed by sideways consolidation and constant retests of a possible lower low between November 2016 to finally breaking above in September of 2017. Shown in Diagram B.

With the Russell 2000 leading us into a two year cycle of sideways consolidation with only two resistance levels that would cement our current Index position. The first sign was in November of 2017 at 1465*. The second being in May of 2019 at 1610*. With only two tests of these resistances. The first being a push above 1610* in May of 2018 to October of 2018 and moved to retest 1465*. The second attempt to break from this sideways consolidation was a retest of a previous resistance level of 1260* between December of 2018 to January of 2019.Shown in Diagram C.

With these three pinnacle movements in the history of the Russell 2000 we can extrapolate Information about the current state of the Russell 2000 Index. With all those resistance levels we have a clear picture of where the Index will have an opportunity. The Russell 2000 is currently on its way to test resistance at 1550*. If the Index is unable to maintain above resistance 1550* it will fall to retest resistance at 1465*. If the Index is able to maintain above resistance level 1550* we will see a test of resistance at 1610*. Shown in Diagram D.

*Charts are created with TradingView, our partner in charting.
Written by Nenad Jordanoski, Futures Trader and Technical Analyst.
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