Make or Break Time for the Russell?The Russell 2000 has gone nowhere since December, but some traders may think the small cap index is poised for a move.
The main pattern on today’s chart is the pair of converging lines along the lows since April and the highs since May. Will there be a breakout from this triangle?
Second, Bollinger Band Width has dropped to its narrowest reading since January 2020. That kind of tight price action may suggest that bulls and bears are at an impasse, waiting for a new trend to emerge.
Third is the price area between the August 2022 high and the peaks in February 2023 and July 2023. RUT bottomed below this zone in April and is now potentially trying to convert old resistance into new support.
Finally, the market has been heavily focused on large cap growth stocks thanks to AI. However, attention could shift to small caps if interest rates move lower. That could make the index worth watching with the consumer price index (CPI) tomorrow morning and the producer price index (PPI) on Friday.
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