Chart of the Day – Tuesday, July 16, 2024

History was made today.

The Russell 2000 closed 4.4 standard deviations above its 50-day moving average.

No other major US index (Dow since 1900, S&P 500 since 1928, and Nasdaq since 1971) has ever closed at that much of an extreme.

“Where were you when…” pic.twitter.com/gd67vSKZx1

— Bespoke (@bespokeinvest) July 16, 2024

Today’s Chart of the Day was shared by Bespoke (@bespokeinvest).

• The Russell 2000 gained another +3.5% today after gapping higher for the fifth consecutive day. This Small Cap index has added a whopping +11.5% since last Tuesday, marking the best five-day rally since April 2020.

• This has indeed been a historic run for Small Caps. Bespoke points out that the Russell 2000 is 4.4 standard deviations above its 50-day moving average, a feat that the major indices have never achieved.

• Small Caps are due for a pause or pullback in the coming days, but this thrust has been very constructive. As of today, the index is within single digits of an all-time high for the first time since January 2022.

The Takeaway: The Russell 2000 is significantly extended after a historic five-day run, but record highs are suddenly within reach by year-end. Another +8% rally would put the index in blue sky territory.