The Russell 2000 Index has been trading in a sideways, top-like pattern for the past several weeks.
We recently pointed this out while sharing our thoughts on the potential for a price reversal to the downside.
Today, I share an updated chart of the Russell 2000 Index.
Regardless of whether or not the Head and Shoulders pattern is too obvious, the price action has been top-like and is producing overhead supply that could thwart any near-term breakout attempts. Just like rounded bottoms are great for a bullish trade, rounded tops are a warning that a decline may be in the offing. This setup is worth watching. Small caps could be an early canary…
The Russell 2000 is weakening and may be in line for a re-test of February / March lows. In any event, this is worth watching.
Russell 2000 Index Chart – Price Analysis
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