Chart of the day

Russell2000 is testing the strong upside resistance of 2040 which is also the top of the falling channel. To extend higher, we must see a confirmed break above 2040 to confirm that we will have the fifth upside wave extension even higher possible but the reversal here will lead to a swing down.

A rejection here does not invalidate the fifth wave it just means we will have a swing pullback. We need to see a clear confirmed break below 2000 for the short trade swing entry medium-term to be justified. Until we see a confirmed break above 2040, we will be in a swing range and can only trade swing short and I expect a pullback here.

Short trades could be opened here with a stop just above 2050. Long trades should be opened only upon a confirmed break above 2040 and stops taken out. The instrument is making a key resistance test.