Small caps, represented by iShares Russell 2000 ETF (IWM), remain within a well-defined rising price channel that has guided the trend for much of the past year. Recently, price has pulled back toward the lower boundary of that channel, an area that has historically acted as support during prior consolidations within the uptrend. When price approaches the lower trendline of a channel, traders often watch closely to see if buyers step in to defend the broader trend.

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The indicator below the chart is the Detrended Price Oscillator (DPO), which helps remove the longer-term trend to highlight shorter-term cycles in price movement. After recently moving into negative territory, the DPO has begun to turn higher, suggesting downside momentum may be fading. If price is able to hold support near the lower channel boundary while the oscillator continues to improve, it could signal a potential shift back toward bullish momentum.

Wishing you the best,

Wendy