Russell 2000

Weekend Reading: Is This The Big One?

"The combined levels of bullish optimism, lack of concern about a possible market correction (don't worry the Fed has the markets back), and rising levels of leverage in markets provide the 'ingredients' for a more severe market correction. However, it is important to understand that these ingredients by themselves are inert. It is because they are inert that they are quickly dismissed under the guise that 'this time is different.' Like a thermite reaction, when these relatively inert ingredients are ignited by a catalyst, they will burn extremely hot. Unfortunately, there is no way to know exactly what that catalyst will be or when it will occur. The problem for individuals is that they are trapped by the combustion an unable to extract themselves in time."

Beware 1200 On The Russell - Breadth Breakdown Is Big Risk To Small Caps, BofA Warns

The US equity market struggled last week but the S&P 500 held the rising 200-day MA once again, but as BofAML notes, the much broader-based NYSE stalled at 200-day MA resistance last week. The NYSE has a potential head and shoulders top as well as a breakdown for the NYSE stocks only advance-decline line through the March low. Similar to the NYSE Comp, the Russell 2000 also shows a potential head and shoulders top with a breadth breakdown a big risk to 1200 support...

Dow Down 1000 Points From Highs, Small Caps Swing Red Year-To-Date

But but but... the smart men on TV said a) rate-hikes are priced-in, 2) rate-hikes are bullisher for stocks than rate-cuts (why would The Fed raise rates if everything was not awesome?), and thirdly) buy the dip! It appears The Fed knows it is going to need some ammo sooner rather than later... But it's not just the mega-caps, The Russell 2000 (small caps) has tumbled back into the red year-to-date...