Chart of the Day – Friday, July 19, 2024
Patrick Dunuwila
The Chart Report
9 months ago
1 MIN READ
This is the best-case scenario for the Russell 2000 $RUT.
Sometimes, you need to go backwards in order to go forward. pic.twitter.com/PHbez8bqrh
— Caleb Franzen (@CalebFranzen) July 19, 2024
Today’s Chart of the Day was shared by Caleb Franzen (@CalebFranzen).
- Small Caps pared their gains from earlier in the week after breaking out to a two-year high on Monday. The Russell 2000 was up as much as +6%, but it finished the week up +1.67%.
- It has pulled back -3.5% (closing basis) over the past three days, which is mild considering the historic momentum that preceded it. The index surged +11.5% in just five days, and RSI reached its most overbought level since 2017.
- Caleb points out that successfully retesting the breakout level (around 2100) would be healthy. On the other hand, violating 2100 would invalidate this week’s breakout for Small Caps.
The Takeaway: The momentous breakout in Small Caps fizzled out throughout the week, with the Russell 2000 giving back over half of its intraweek gains. This has been a healthy pullback, but violating 2100 would be unhealthy.
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