Russell 2000 – Bullish Signal

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.

SPX and RUT

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.        

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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