Small caps teeter on the edge of correction
IWM•The Russell 2000 ended Wednesday about 9% below its August 14 record close, nearing the 10% decline that defines a correction. The index tested support near 2,786 as futures fell around 0.8% ahead of Thursday’s open.
1. Support levels tested
The Russell 2000 fell to 2,788.43 on Wednesday before closing at 2,793.20. Its rising 200-day moving average is near 2,786, with additional support at the October 1 low of 2,775 and a trendline near 2,771.
2. Further levels to watch
If the index breaks lower, the article identifies support at 2,754, 2,740, 2,735.10 and 2,722. A decisive close below 2,722 could raise the risk of a deeper decline toward 2,559; the article says the index’s 9-day Relative Strength Index is nearing oversold territory, leaving open the possibility of a sharp reversal.
3. Potential resistance
Initial resistance is near 2,865, followed by the declining 50-day moving average near 2,935. The S&P 500 and Nasdaq Composite reached fresh record highs this week, while the Russell 2000 lagged.
