Have Small Caps Hit a Wall?The Russell 2000 has lagged the broader market for years, and now some traders may think it’s stalling again.
The first pattern on today’s chart is the February 14 weekly close of 2,280. The small cap index approached that level last Thursday but couldn’t hold. The resulting “shooting star” candlestick pattern, near a weekly level, may confirm that old resistance remains in place.
Second, RUT made a higher high yesterday and a lower low. That kind of bearish outside day is a potential reversal pattern.
Third, prices returned to a weekly low from July 1. Crossing below it could suggest support is breaking.
Fourth, stochastics are dipping from an overbought condition.
Finally, small caps are sensitive to borrowing costs. The 10-year Treasury yield has been making higher highs and higher lows on its weekly chart. Could further upside keep weighing on small caps?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. If you're born to trade, we could be for you. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
