Thursday's Market Minute: Russell Races Ahead

Russell 2000 futures led the way to the upside yesterday, logging a 1.7% gain and far outpacing the other major equity indices. But in the bigger picture, the small-cap index has been spinning its wheels since early February despite making all-time highs in March. The /RTY has churned sideways within a gradually narrowing wedge pattern, most recently on steadily declining volume since the spikes during the last downward move that began on May 10.

This range-bound price action resulted in several of the major simple & exponential moving averages (50-SMA, 100-SMA, 21-EMA, 63-EMA) trending sideways and converging, and now are all within the relatively tight range of about 2210 to 2232. After gaining traction near the 63-EMA during the past few days, the Russell vaulted up to cross above all these moving averages in a single session yesterday and finished with a strong close near the day’s highs. Other recent technical developments include bullish MACD and Parabolic SAR crossovers.

To the downside, watch the previously mentioned cluster of moving averages for support, as well as the yearly Volume Profile Point of Control, which is the area of heaviest trading, near 2200. As for resistance, look for the confluence of the yearly Linear Regression 50% channel lower line near 2270 and the downward trend line connecting the highs from Mar. 15 to late April near 2267.

Image Sourced from Pixabay