Russell 2000 Sets Record: Near Highs… But No New Highs

The Russell 2000 just spent over a month within 1 percent of its 52-week high, without achieving a new high – a streak twice as long as the previous record.

If it seems as if the small-cap segment of the stock market has been running in place, you are not imagining things.

As large-caps have scored new high after new high over the past month, small-caps have gone nowhere – literally. Specifically, the Russell 2000 Small-Cap Index (INDEXRUSSELL:RUT) hit a new 52-week high on October 5. From that day through November 7, the RUT traded within 1% of that high during every single day at some point – without closing at a new 52-week high.

If an entire month seems like a long streak of “close but no cigar” days, you are correct again.

Sign up for our FREE newsletter
and receive our best trading ideas and research

In fact, at 23 days, the streak (which ended today) was nearly twice as long as the previous record long streak of 12. It is also just the 9th such streak of at least 8 days ever in the Russell 2000.

Russell 2000 Chart… and “record” illustration

russell 2000 trading near all time highs october november_weak momentum_record streak no highs

Was there a common resolution to previous similar streaks? That is, what happened to the Russell 2000 following the 8 historical precedents? Is there a pattern that we can apply to our present situation in shaping our expectations for small-caps going forward? In particular, what does history tell us about these streaks when they are broken to the downside as we saw today?

We are taking a deeper look at that over on our premium platform, The Lyons Share.


Twitter:  @JLyonsFundMgmt

The author may have a position in mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.