How strong is the Russell 2000

Last week I wrote about the potential strength in the Russell 2000. It was facing a test and could prove that it was still headed higher. Well it passed that test at the end of the week, holding over support at what was once resistance. And it has entered the Thanksgiving week with new strength. How high can it go though?

First, the market can do whatever it wants to do, there is no predetermined path. But following price action, the battle for supply and demand in the market, can give clues as to the sentiment of the players. Technical Analysts and traders spend their lives reading this sentiment and acting on it within a risk management framework. I am one of them and when I read the sentiment in the Russell 2000 I get excited. Not as excited as Charlie Rose walking into a business meeting naked, but very excited.

By one measure the Russell 2000 could be getting ready to make a major move higher. An AB=CD pattern in the Index ETF ($IWM) is forming now. A move to a new high will give full confirmation and then it would suggest a target to at least 161.50 around the end of the year. How is that for a Holiday gift! Momentum supports the move at this point as it races higher as well. So keep your clothes on, but get excited about the renewed Russell 2000 leadership.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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