In late September 2022 the Russell 2000 (RUT) small cap stock index bottomed before the S&P 500 (SPX). After the 09/30/22 SPX bottom, RUT rallied higher relative to the SPX. Then on 10/07/22 during a large decline in US stocks, RUT fell less relative to the SPX.
The 30- minute SPX and RUT chart courtesy of Trading View compares the indices.
While the SPX has retraced 83.5% of its rally after 09/30/22, RUT has only retraced 64.5% of its move up from late September 2022.
If the bear market has resumed you would expect the small cap stock index to be leading the way down. Smaller companies are much more sensitive to economic weakness than larger companies.
If on 10/10/22 the SPX breaks below its 09/30/22 bottom at 3,584.13 it would invalidate the Elliott wave – Expanding Flat pattern illustrated in the 10/02/22 blog “Elliott Wave Alternate Bullish Interpretation – 09/30/22”. A break below 3584.13 opens the door for a rapid one or two week decline to the SPX 3,200 area.
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