While the Nasdaq and S&P 500 made new all time highs a month ago the smaller cap stocks making up the Russell 2000 did not fare as well.
That is just great if the largest 500 companies in the country are kicking ass or if a handful of FANG tech stocks are soaring, but that doesn't give us a true gauge of have the majority of business are performing and the confidence that exists in their businesses.
In the end, that is what the stock market is a gauge of. Stock price reflects the sentiment of a businesses operations and prospects going forward.
It is good to see that the Russell 2000 regained most of the covid crash, but reality was more in play as the index never got back to pre-covid highs and after a four month rebound rally, the index broke the uptrend and is at risk of forming a downtrend if prices were to turn lower here.
Even if that does not happen, 1,600 is looking like a tough upside resistance with a double top in place.
I expect some volatility coming into the election too boot!
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