The Russell 2000 Small Cap Index continues the roll over that began last month. It’s moved back into the widening top triangle range but more recently it managed to make a series of small long-tail hammer-like candles.
This cluster of neutral-to-slightly bullish candles suggests that there could be a pause in the downturn and a brief period of consolidation.
If the consolidation takes place below the extended upper trend line of the triangle and below the 50 day moving average, the end result would most likely be a continuation of the downturn. .
If the index was able to consolidate back above the trend line and the moving average, it would constitute much more constructive action, and could result in a bullish reversal.