Russell 2000 daily
The Russell 2000 is the standout US equity performer today once again, up 1.8%, or 35 points. That leaves it just 12 points from the top of a series of highs over the past two years.
This is such an interesting crossroads. Technically, it’s stalled out here four times and had major drawdowns each time. On the other hand, it tried to break the downside six weeks ago and has been a rocketship since, with the some obvious fundamental backing.
It’s overbought in the short term here but do overbought metrics matter when there’s a fundamental change?
I think it ultimately breaks out because there will be a rotation from mega-cap tech to small-cap value early next year and as the Fed gets the cutting cycle underway.