TRADE SETUP

Where do we stand fundamentally?

President Trump’s tariffs could still pressure the economy, impacting small-cap firms reliant on domestic growth. Moody’s downgrade of U.S. debt has also raised fears about rising yields (near 4.97%) and ballooning debt, potentially weighing on small-cap valuations. Analysts note that while the index has climbed 22% year-to-date, its sensitivity to economic shifts and interest rate expectations (with the Fed signaling only one rate cut in 2025) could cap further gains

RUSSELL2000 is reaching the top of the strong upside resistance of 2137. A break above this resistance could lead to an extension higher.

For the rally to continue, we need a sustained breakout above 2137. I am inclined to a short trade entry in the short term, as this resistance will be too strong to overcome, considering the global and US economic uncertainty. After a pullback, we could see a new attack on this resistance

_{I am taking a near-term short-trade entry with a SL above 2170 to target 1855. You can buy put options as well.}