The Russell 2000 ETF ($IWM) recently jumped 11% from an important support level, with a target range of $258 to $268 still on the horizon. Using Elliott Wave Theory, we see that the rally since the November 2025 low consists of a 5-wave impulse, indicating a pullback is likely. A 7-swing WXY correction has taken place, with buyers stepping in between $229.87 and $219.62. The ETF reached new all-time highs and is now set for a pullback before continuing its rise towards the target range of $258 to $268. Elliott Wave analysis shows that $IWM has solid support near its November 2025 lows. Traders who bought in this support zone should keep an eye on the $258 to $268 range as a possible goal. Watch for corrective pullbacks as they might create new entry opportunities. By using Elliott Wave Theory, traders can gain insights into market cycles and predict future movements. This helps enhance risk management strategies in the fast-changing market conditions we see with $IWM. — We are witnessing a significant 11% rally in the Russell 2000 ETF since the November lows, driven by rising economic optimism. The recent CPI report showed core inflation dropping to 2.5%, its lowest in three years, and the Federal Reserve’s shift in policy is also supporting these smaller companies. This bullish movement indicates strong underlying support for the market. Now that the ETF is taking a breather after these gains, we see any near-term pullback as a chance to prepare for the next upswing. Selling cash-secured puts on IWM during dips could be a smart strategy to enter this bullish trend. This approach allows traders to earn premiums while setting a potentially lower entry price. For those anticipating movement towards the $258 target, buying call options is a leveraged way to benefit from the expected rise. If we look at past small-cap breakouts, like the one in late 2020 following a challenging period, these trends can escalate quickly. Utilizing bull call spreads can help manage costs and define risk as the ETF nears its goal. It’s also important to keep an eye on implied volatility, which has decreased since peaking in October 2025, as market confidence returns. Lower volatility can reduce the value of long option positions, making strategies like credit spreads more appealing. Thus, traders should consider setups that benefit from both rising prices and steady or declining volatility.

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