Positive Vibes in the Russell 2000

The Russell 2000 took charge and moved up out of consolidation in May. It rant to a new all-time high in the middle of June and then stalled. A quick pullback and bounce to the prior high established a consolidation zone. It has been in that consolidation ever since.

The chart below shows that activity in the Russell 2000 ETF, $IWM. With the uptick Tuesday it may have bounced off of the bottom of the range yet again. Seems like just more sideways price action for the rest of the summer now that it is turning. But maybe there is something else happening under the surface.

Looking within the consolidation there are some positive vibes developing, should Monday’s low hold up. First, the low was a higher low. That alone would signal tightening consolidation. But then looking at momentum the story gets better. The RSI found support at a lower low, different from the price, and also turned up.

This triggers a Positive RSI Reversal. And that pattern looks for a move higher in price at least as big as the prior leg up. That gives a price target to 171.60 on the IWM, or a new all-time high. Symmetry would suggest that happens somewhere in the middle of next week. Not a guarantee, but certainly positive vibes brewing.