Fundamental
Overview
The Russell 2000 has been rallying
steadily this week thanks to positive news both on the tariffs and inflation
front. On Monday, we got a news
from Bloomberg that the Trump’s team was studying gradual tariffs hikes.
On Tuesday, we got a very
soft US
PPI report and yesterday lower than expected US
Core CPI data. The market pricing edged higher from 24 bps of easing by
year end to 36 bps following the US CPI report.
This week might have marked
the top in inflation hysteria and the repricing in rate cuts expectations,
which should support the market going forward as long as growth doesn’t start
to weaken too much.
Russell 2000
Technical Analysis – Daily Timeframe
Russell 2000 Daily
On the daily chart, we can
see that the Russell 2000 eventually bounced from the major trendline around the 2200 level after a
failed breakout and rallied all the way back to the key 2300 resistance.
This is where the sellers are stepping in with a defined risk above the
resistance to position for a break below the major trendline. The buyers, on
the other hand, will want to see the price breaking higher to increase the
bullish bets into a new all-time high.
Russell 2000 Technical
Analysis – 4 hour Timeframe
Russell 2000 4 hour
On the 4 hour chart, we can
see that we now have a range between the 2300 resistance and the 2200 support. The
market participants will likely keep on playing the range until we get a
breakout on either side.
Russell 2000 Technical
Analysis – 1 hour Timeframe
Russell 2000 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely continue to lean on the trendline to keep pushing into
new highs, while the sellers will look for a break lower to increase the
bearish bets into the support. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the latest US Jobless Claims figures and the US Retail Sales
data.