Smallcap Index in US at New High

The Smallcap Index in the US as represented by the Russell 2000 Index has hit a new High.

The MACD is positive and RSI is overbought zone. New Highs are always bullish. Also usually after a crash , large caps rally first followed by smallcaps. This is because people usually develop risk-on as they get more signs of the economy recovering. After a massive rally in large caps, it is high probability that it is time for smallcaps to catch up.

See the relative strength chart of Smallcaps vs Large Caps. It has broken above a key resistance and and also above the 50 and 200 day Moving Averages (MA). This is after a long downtrend starting from 2018 beginning.

All this points to outperformance of smallcaps going forward. This is the space we want to be overweight in.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: