I'm not seeing cups, saucers, handles, smiley faces OR frowny faces in small caps…
…I just see a big, long pressure-pump of a range coiling up all while momentum has remained comfortably in a bullish regime.
Call me optimistic, but I think $IWM & $IJR resolve to the upside. pic.twitter.com/YqJErck88S
— Adam D. Koós, CFP®, CMT, CEPA (@AdamKoos) July 22, 2021
Today’s Chart of the Day was shared by Adam Koós (@AdamKoos) It’s a daily candlestick chart of the Russell 2000 ETF, $IWM, over the past 10 months. On Monday, we took a look at the Russell 2000 as it was testing a crucial support level for the fourth time. Fortunately for the bulls, the fourth test was a success! However, even with the strong rebound on Tuesday and Wednesday, $IWM continues to be rangebound between $210 and $234. This four-month range appears to be a healthy consolidation phase, given how strong the prior trend was. Adam adds, that momentum has remained bullish throughout this consolidation, with RSI never reaching oversold conditions. Small-Caps tend to lead the broader market higher or lower. So, it would be a big positive for the broader market if the Russell 2000 does eventually resolve higher out of this consolidation.