The Russell 2000 has erased gains from the recent FOMC meeting and is facing potential selloff risks. The Fed maintained interest rates and adjusted quantitative tightening, while revising growth estimates down and inflation expectations upward.
On the daily chart, the index bounced off a critical support level at 1993. Sellers may find better opportunities near the 2172 level, whereas buyers need the price to surpass the major trendline to aim for new cycle highs.
Four Hour Chart Breakdown
The 4-hour chart shows a break below an upward trendline, increasing selling pressure with targets back towards the 1993 support. Buyers, however, must wait for a price rise above the trendline for a potential rally.
On the 1-hour chart, support at 2075 has been breached, indicating potential for further declines. Sellers may act around this level, whereas buyers are looking for a price recovery to reach the major trendline.
The index has surrendered its prior gains, indicating hesitation among market participants following the Federal Reserve’s latest decision. Interest rates remain unchanged, while adjustments to quantitative tightening suggest policymakers are responding to shifting economic conditions. Downward revisions in growth projections contrast with rising inflation expectations, reinforcing uncertainty. This combination presents a more challenging setup for those taking directional positions in the short term.
Looking at the daily timeframe, the rebound from 1993 underscores its relevance as a level where buyers have previously stepped in. Yet, meaningful resistance remains at 2172, where those looking to take advantage of stretched prices might see a better opportunity. If upward momentum resumes, a break above the existing trendline would offer a foundation for a more extended move higher. Until that happens, strength could be met with renewed selling.
Short Term Market Sentiment
Shorter-term signals lean more negative. The four-hour chart displays a breach of an upward trendline, reinforcing downside pressure. With support at 1993 remaining the primary target, any attempt at recovery must first navigate back above the broken trendline before confidence can return. The failure to hold prior levels leaves sellers with more control, at least for now.
On an even narrower view, the one-hour chart highlights additional weakness after the breakdown of 2075. Losing that support increases the probability of a deeper decline, and sellers may stay active as long as price struggles under that threshold. Any rebound could provide a second chance for those looking to re-establish positions, though for buyers, overcoming resistance remains essential before considering any sustained recovery.
Every move here carries weight, with technical barriers shaping decisions. Levels referenced before should be monitored closely, as they continue to dictate short-term bias. Those engaging in this environment need to account for prevailing pressures while being ready to adjust as the situation develops.
