Tackle Today: Small Caps Probe Resistance
May 23, 2023
Is a breakout finally brewing?.
Traders,
Rotation into banks, biotech, and ARKK helped boost the Russell 2000 Index ETF up 1.22% yesterday, far outpacing large caps. The rally carried small caps to the top end of their two-month range, leaving some to wonder if we’ll finally get a breakout. Heaven knows the little guys could use a boost. Ever since regional banks cratered the Russell, it’s been stuck in the mud – even as the Nasdaq and S&P 500 have been ripping.
The Russell’s unwillingness to participate has resulted in narrow leadership and a bifurcated backdrop. A successful breakout would go a long way to broadening the bull market and energizing spectators. With IWM nestled near resistance, we won’t have to wait long for resolution. Either this bid gets rejected like its half-a-dozen predecessors, or we finally succeed.
Yesterday’s Tales of a Technician blog explored the four groups of market participants and used IWM as a case study for why resistance breakouts are compelling patterns. If you missed it on the first pass, check it out now!
Chart of the Day: Small Caps (IWM)
Will resistance hold firm, or will we finally depart the range?
Today’s line up
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