Chart of the day

Where do we stand fundamentally?

The Russell 2000 often serves as a broader indicator of the U.S. economy due to its focus on small-cap companies. Recent economic news, like the Federal Reserve's decision to cut interest rates by 25 basis points, has been noted to positively impact the index.

For investors, the Russell 2000 is often seen as a benchmark for small-cap investments. Discussions around its performance can influence investment strategies, particularly in sectors where small-cap companies are more prevalent.

Russell2000 reached 2470 resistance, which could be a peak of the third wave. A pullback in the fourth wave has started which can target 2150 before an extension higher in the fifth wave. This is the possible reversal point short term. My KNOWPO trading system is indicating a good low-risk short trade here, so I am expecting a reversal downside (outlined red waves representing the short-term cycle).

A break above 2480 will invalidate the downside reversal and will lead to an extension higher in the fifth wave targeting 2800 and we need a confirmed break below 2350 for a downside reversal to gain traction.

_{You can take a short trade entry with a stop loss above 2450 to target 2150 and lower.}