While the S&P 500 Index is up approximately 6 % since last July, the broader Russell 2000 index is actually down approximately 7%. The index measures companies that have comparatively smaller market capitalization. This large discrepancy has led us to closely watch the Russell 2000.
It is our thinking that if the price point breaks out of its charted “wedge” as shown below, it could continue higher and catch up with the S&P 500 index. If, however, it breaks out of the “wedge” heading lower, then it might pull down the rest of the market averages over time.
Source: Worden TC2000 v. 17 [Computer Software]. (2019). IWM [stock index data]. Retrieved from TC2000 database.
