Resistance Turned Support — 5 Charts Setting Up Now
Market volatility has been the story of 2026 so far. Anyone paying attention shouldn’t be surprised. Midterm election years are historically some of the most volatile periods for equities. Policy uncertainty rises, positioning shifts, and markets swing harder than usual.
But volatility is not the same thing as weakness.
In fact, volatility often creates opportunity—especially when it pushes price back into key structural levels.
I’m not a big fan of blindly “buying dips.” That strategy works great until it doesn’t. What I prefer to see is former resistance turning into support. When a major level breaks, the best confirmation often comes later when price pulls back, tests that level again, and buyers step in.
One of the cleanest signals is when candle wicks begin bouncing off those zones. That tells us buyers are defending the level.
Right now, several important areas of the market are showing exactly that setup.
Russell 2000 — IWM 0.00%↑
Small caps are one of the clearest examples of resistance turning into support.
The Russell 2000 recently broke above the $243 zone, a level that capped the market multiple times over the past few years. After the breakout, price pulled back directly into that level and buyers stepped in immediately.
The long lower wicks around that zone tell the story. Sellers tried to push it lower. Buyers absorbed it.
If this level holds, the Russell has room to move toward the $280–$300 region over time. Small caps tend to outperform in reflationary environments, and this setup fits that narrative perfectly.
Emerging Markets — EEM 0.00%↑
Emerging markets are showing a similar structure.
