The broader market indices pierced through overhead resistance like a light saber through butter last week, with leadership come from old line technology and industrial names. The S&P 500 index and the NASDAQ Composite are back above levels that acted as support for much of the year, but the Russel 2000 index is lagging, still unable to make new highs this month.
There may be an indication, however, that the Russell is ready to participate, with the formation of a morningstar bullish reversal candle pattern on its weekly chart. This pattern is defined by a large down day, followed by a narrow opening and closing range “doji” candle, and completed by a large up day. It represents a transition from bearishness to bullishness. All the index needs to do now is break above nearby horizontal resistance.