Thursday, July 12, 2012

Russell2000 Displays Relative Strength

Over the past 2 months the Russell2000 index has been taking on a leadership role when compared to the Dow, NASDAQ and S&P500.  Above is a 2 hour chart of the Russell2000 index and in the lower panes we have a ratio chart of the Russell2000/S&P500 and at the very bottom pane is the stochastics oscillator.  You'll notice today the Russell appears to have bounced off of a significant uptrend line. The ratio line has also been trending higher indicating that small caps are outperforming the S&P500. The stochastic oscillator is also turning upward from an oversold condition suggesting a rally back up to recent highs.

1 comment:

Anonymous said...

I imagine the smaller-cap, broader Russell 2000 vs S&P 500 is more about the argument for USA vs Global outlook... So market more bullish for the US's prospects relative to the world (and the US $, given overseas earnings will fall as $ rises). Which as an unfortunate European I have to agree on.



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