The Russell 2000 is taking a break for tea in its trip higher

• Posted by Greg Harmon
• on March 15th, 2016

Two weeks ago I noted that the Russell 2000 was making great strides toward a reversal in The Russell 2000 has cleared many hurdles already. As the time has passed it is time to check in on the Russell 2000 again. It still looks good, but appears to be taking a break for afternoon tea.

The Shark harmonic remains in tact with its two targets above at about 113 and 118. Remember that those are price levels where the harmonic would start to watch for a reversal lower, not a prediction that it will happen. But now there is a second pattern. A cup and Handle (yellow). This pattern carries a target to 123. Those that follow work closely will know this added pattern pointing higher gets me excited.

Whenever there are multiple different forms of technical analysis that point in the same direction for a stock, it paints a clearer picture in that direction. A mosaic of of analysis like in the Russell 2000 means that many types of traders are aligning their views. In this case the Shark harmonic and Cup and Handle are joined by the momentum indicators RSI and MACD pointing to higher prices. And the volatility indicator, the Bollinger Bands®, also support a path higher.

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