Thursday's Market Minute: Bears Claw Back Russell 2000's Breakout

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Russell 2000 futures haven’t enjoyed the recent rally to the same degree as its three cohorts among the major equity index futures, as the contract limped sideways past a downward trendline that’s been in play since the yearly highs in November without much of a breakout until Tuesday’s +2.7% jump.

But bulls couldn’t hang on above the key 2,100 level, which has long been a point of both support and resistance. Another important development was that the move closed above 252-day Exponential Moving Average on Tuesday, but fell back below yesterday and also closed below the yearly Linear Regression Line near 2,098.

In terms of other indicators, the Average Directional Index turned up from a trough, which suggests the uptrend is strengthening. The MACD also saw a bullish crossover that coincided with the break above the downward trendline, but it shows that momentum since then has waned. 

The /RTY tends to be the least correlated to its peers, and has been living up to that reputation lately. This is to say that the /RTY’s price movement and chart tend to look much different than the S&P 500, Dow, and Nasdaq-100, which is important because small-caps tend to be perceived as riskier and thus are viewed as a leading indicator for stocks.

A main upside resistance point is 2,100, and more broadly the area between about 2,080 and 2,120 as it represents the support zone that held for most of 2021. If the move up continues, the 200-SMA near 2,186 would be the last remaining major moving average that could be resistance. To the downside, watch the 63-day moving average, now near 2,071.

Image sourced from Pixabay

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.