Russell 2000 at Important Risk-On vs Risk-Off Crossroads!

Published 12/20/2024, 07:39 AM

The stock market has been charging higher into year end. Then came the FED interest rate decision and comments.

But even a couple weeks before this, an area of the stock market was already pulling back: the small-cap Russell 2000 Index.Russell 2000-Weekly Chart

The small cap index tested its 2021 highs a couple of weeks ago, where a bearish weekly pattern occurred.

Basically, the small caps are still trading within a 4-year trading range (red and green lines).

And the Russell 2000 is now testing an important trend line support at (1). Bulls are hoping it holds.

In my humble opinion, investors should be watching what happens here with small caps. It will likely send a message about risk-on or risk-off. Stay tuned!

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