Stocks

Small Caps Russell 2000 Looks Attractive: Elliott WavesJun 28, 2022

Hello traders and investors, today we will talk about small caps Russell 2000, in which from Elliott wave perspective, we see a completed 7-swing complex correction from the highs.

Russell 2000 topped and completed its 5th wave of a five-wave bullish impulse already back in November 2021. Since then we can see slow, choppy and overlapped wave structure that we see it as a correction within uptrend. It’s ideally a complex 7-swing A-B-C-X-A-B-C, called also a double three W-X-Y corrective pattern.

Russell 2000 Daily Chart
Russell 2000 Daily Chart

Well, if we are on the right path and if Russell manages to recover back above 1920 region and resistance line of a corrective channel in current risk-on sentiment, then we can easily confirm support in place and bulls back in the game.

Complex or Double Three Correction

A Double three is a sideways combination of two corrective patterns. It’s a complex Elliott wave that is subdivided into three minor waves W, X and Y. Its internal structure is (3, 3, 3). In effect, the number three relates to corrective waves, therefore the structure (3, 3, 3) indicates that the WXY wave pattern is composed of three distinctive corrective waves.
-A combination of two corrective structures labelled as WXY
-Wave W and wave Y subdivision can be zigzag , flat, double three of smaller degree, or triple three of smaller degree
-Wave X can be any corrective structure

All the best!

Even SP500 is trading at strong support. Check our latest chart HERE

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