Russell 2000 Outperform Into End of Year? - November 7, 2025 #shorts

Key Concepts

• Russell 2000
• Intermediate-term downtrends
• Lower highs and lower lows
• Anchor (price level)
• 50-day moving average
• Daily volume weighted average price (VWAP)
• Swing trade
• Weekly time frame
• All-time high
• Extended breakout
• Shakeout

Market Analysis of the Russell 2000

The Russell 2000 has been exhibiting a consistent pattern of lower highs and lower lows, indicating an intermediate-term downtrend. While bounces can occur within such trends, the current market conditions, described as "no man's land," suggest a higher probability of failure for these upward movements.

Specific Trading Strategy and Entry Point

A key observation was the undercut of a specific "anchor" price level, which also represented a previous low, and the subsequent undercut of the 50-day moving average. This scenario was previously outlined for Alpha Trend subscribers. The recommended entry strategy involved buying the asset when it reversed after this undercut. Specifically, the afternoon trading session provided an opportunity when the price battled with and then moved back above the daily volume weighted average price (VWAP). The suggested stop-loss placement was either below the formed higher low or the day's low.

Potential for Swing Trade and Future Price Action

Traders were presented with the option to transition at least a portion of their position into a swing trade. A potential scenario for future price action involves a rally towards the "anchor" from the previous high in the Russell 2000, followed by a pullback to build energy, and then a potential continuation of the upward movement.

Current Market Range and Weekly Time Frame Perspective

Despite the short-term downtrend signals, the Russell 2000 has been trading within a broad, choppy range for the past couple of months, lacking a strong directional bias. However, on the weekly time frame, the index had previously broken out to a new all-time high and was considered "extended" on that breakout. This suggests that the current downward movement might be a "normal shakeout."

Conclusion and Outlook

The current market action, particularly the potential "shakeout" on the weekly chart after an extended breakout to an all-time high, could pave the way for a recovery and improved performance for the Russell 2000 in the final two and a half months of the year. The key takeaway is that while short-term downtrend signals are present, the broader weekly context suggests a possibility of a rebound.