Russell 2000 is the laggard, while the S&P 500, Nasdaq, and Dow scale new record highs.
Could small caps be next to break out?
While all major US equity indices are hitting new all-time highs, the Russell 2000 is still consolidating just below resistance. This sets up a pivotal moment for traders as the Fed decision looms and Q4 earnings heat up.
Price is holding above the lower trendline of a potential ascending triangle pattern, with buyers defending support and momentum building for a potential breakout above peak resistance.
RSI on a daily basis sits in the mid-50s (neutral), but with room for renewed upside if a breakout occurs. Alternatively, a reset down to oversold could lead to a short-term decline of around 5% to the prior bottom.
But October’s strong earnings and increased bets on Fed rate cuts provide a positive tailwind for small caps this quarter.
Watch for a shift in flows from big tech and mega-caps to small caps if market breadth improves post-Fed.
Keep an eye on the top, as a breakout could open the door to new all-time highs and fresh momentum for the Russell 2000. Don’t miss the rotation potential as Q4 trading picks up.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Could small caps be next to break out?
While all major US equity indices are hitting new all-time highs, the Russell 2000 is still consolidating just below resistance. This sets up a pivotal moment for traders as the Fed decision looms and Q4 earnings heat up.
Price is holding above the lower trendline of a potential ascending triangle pattern, with buyers defending support and momentum building for a potential breakout above peak resistance.
RSI on a daily basis sits in the mid-50s (neutral), but with room for renewed upside if a breakout occurs. Alternatively, a reset down to oversold could lead to a short-term decline of around 5% to the prior bottom.
But October’s strong earnings and increased bets on Fed rate cuts provide a positive tailwind for small caps this quarter.
Watch for a shift in flows from big tech and mega-caps to small caps if market breadth improves post-Fed.
Keep an eye on the top, as a breakout could open the door to new all-time highs and fresh momentum for the Russell 2000. Don’t miss the rotation potential as Q4 trading picks up.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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免責事項
これらの情報および投稿は、TradingViewが提供または承認する金融、投資、取引、またはその他の種類の助言もしくは推奨であることを意図したものではなく、またこれらに該当するものでもありません。詳細は利用規約をご覧ください。