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Russell 2000 Breaks to New Highs as Bull Market Momentum Grows

Published 10/17/2024, 07:27 AM
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The Russell 2000 (IWM) joined the S&P 500 as managed to push to a new closing high (although just shy of a new all-time high). This has been a 3-year journey for the index, and marks an important milestone as part of the secular bull market continuation - which kicked off in 2012 - but started with the generational low in 2009. Only the Nasdaq is left to join the party.

In addition to the breakout, the Russell 2000 ($IWM) enjoyed a return to relative outperformance against the Nasdaq, and booked two consecutive accumulation days to add to the net bullish technical picture. All good here.IWM-Daily Chart

Little to say about the S&P. It's chugging along in bullish form. Volume has been quiet, bar yesterday's confirmed distribution. Technicals are net bullish, including its outperformance relative to the Nasdaq.SPX-Daily Chart

The Nasdaq is lurking just below its July high and is well-placed to drive a breakout. Yesterday's modest bullish 'hammer' just above its 20-day MA is another reason for optimism.

As with the S&P, it booked a distribution day yesterday, and given gains in peer indices, it's underperforming relative to them, but not to any worrying degree.Nasdaq Composite-Daily Chart

For later today, we won't want to see a break of yesterday's lows. Modest loses are okay. Intraday loses are fine. But we will want to see a strong last hour to show that buyers are lurking and willing to defend and buy 'value'.

There are a number of economic data points to influence premarket; if data disappoints, then look for a gap down at the open, but if buyers then step in it could prove to be a very positive day.

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