RTY IdeaHere’s an idea of how the Russell could play out during the first half of 2025, with continued profit-taking from large caps into small caps.
RTY1! trade ideas
U.S. Stock Indices In Recovery ModeU.S. stock indices have seen a lot of volatility with significant chop back and forth starting off 2025. With the new year comes a new administration, changing foreign policy, changing of the Fed interest rate environment, and a different earnings outlook for stocks. Looking at the small caps with the Russell 2000, the market has been in a range between the 50-day moving average and the 200-day moving average since the breakdown on December 18th, and has not been able to break on either side of these levels.
After a broad selloff starting off the week for the indices, the Russell has been climbing back higher after re-testing the 200-day moving average. The market has been trading above this 200-day moving average since December of 2023 and will need some type of catalyst to break out of the current range. The Russell, or small cap stocks in general, typically are the most sensitive to interest rate changes, and with the changing tone from the Fed and the probability of rate cuts coming this year, traders will be watching the Russell 2000.
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**All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
Russell 2000 Faces Pressure Amid Tariff Uncertainty-As of February 4, 2025, the Russell 2000 Index, which represents small-cap stocks, has experienced notable market movements influenced by recent geopolitical events.
Recent Performance:
February 3, 2025: The Russell 2000 declined by 1.3%, reacting to newly announced tariffs by President Donald Trump on imports from Canada, Mexico, and China. These tariffs have introduced uncertainties, particularly affecting smaller companies with significant domestic exposure.
APNEWS.COM
Year-to-Date Overview:
Despite the recent downturn, the Russell 2000 has achieved a year-to-date gain of 1.3%, indicating resilience amid market volatility.
APNEWS.COM
Analyst Insights:
Analysts suggest that small-cap stocks, as represented by the Russell 2000, could face challenges due to sustained high interest rates and potential economic policies. However, the index is currently trading at relatively attractive valuations, signaling potential buying opportunities for investors.
BARRONS.COM
Market Sentiment:
The recent imposition of tariffs has heightened market uncertainties, particularly for small-cap companies with significant domestic operations. Investors are advised to monitor these developments closely, as they may influence the Russell 2000's performance in the near term.
Please note that market conditions are subject to rapid change. It's essential to stay updated with the latest financial news and consult with financial advisors when making investment decisions.
Russell 2000 and 50DMA: The Mix for Explosive MovesWith fresh data on US GDP and inflation arriving over the next two days, Russell 2000 futures look interesting as they close in on the key 50DMA.
The index is testing minor resistance at 2312.8 in thin Asian trade, with the 50DMA not far above at 2323.5. The focus on the latter comes from its tendency to spark explosive moves once the price either breaks or bounces from it.
Over this week and last, bulls have repeatedly probed the level only to be thwarted by bears, painting a picture of a stalemate that may be eventually be resolved in a similar manner. The string of doji candles since only reinforces this view.
If we see a sustained break above the 50DMA, longs could be established above it with a stop either below it or at 2312.8 for protection. 2386.6—which has acted as both support and resistance previously—is one potential target. A break above that would put a retest of record highs on the table.
Alternatively, another rejection at the 50DMA would be a strong signal that a bearish bias may be warranted.
Mixed signals are emerging from momentum indicators, with MACD pushing higher while RSI (14) sits in a minor downtrend, though it’s threatening to shift higher.
Upcoming economic data screens as important for small-cap US stocks given their cyclical characteristics and reliance on capital markets for funding.
Good luck
DS
RTY Daily_BULLISH_+2,175 TicksThe RTY daily time frame is in an up channel. The
market is near the bottom of the channel. If support
holds, it is expected the market to push bullish towards
the top of the channel price point 2483.8 about +2,175
ticks above. As long as the market stays above the bottom
of the channel. It will be a good idea to turn to the one
hour time frame and to look for long ideas in the buy zone.
Rut forming cup and handle?So, Rut closed a nice cup, and might enter a consolidation period to form the handle.
anyhow, with the handle or not, its approaching strong resistance around 2450.
a break will be a nice move up with a possible target of around 3200 (which is 30% up).
Has anyone said Donald like the smbs? (:
Elliott Wave View on Russell 2000 (RTY) Calling to Resume HIgherShort Term Elliott Wave view on Russell 2000 (RTY) suggests rally from 8.5.2024 low is in progress as a 5 waves impulse. Up from 8.5.2024 low, wave 1 ended at 2311.4 and pullback in wave 2 ended at 2198.51 like the 1 hour chart below shows. The Index then extends higher in wave 3 with internal subdivision as an impulse. Up from wave 2, wave ((i)) ended at 2240 and dips in wave ((ii)) ended at 2203.3. Rally in wave ((iii)) higher ended at 2424.5 and pullback in wave ((iv)) ended at 2386.5. Final leg wave ((v)) ended at 2455.6 which completed wave 3 in higher degree.
Wave 4 pullback is in progress with internal subdivision as a zigzag Elliott Wave structure. Down from wave 3, wave (i) ended at 2425.9 and wave (ii) rally ended at 2449.7. Wave (iii) lower ended at 2396.3 and wave (iv) rally ended at 2413.8. Final leg wave (v) ended at 2391.4 which completed wave ((a)) in higher degree. Rally in wave ((b)) ended at 2435.6. Expect wave ((c)) lower to end at 2330 – 2370 area to complete wave 4 in higher degree. From there, the Index can then see further upside or rally in 3 waves at least.
