The Most Rate-Sensitive Trade Is Starting To Crack

Small caps under pressure

The Russell is starting to feel the rates move. Small caps are back at the 100-day MA for the first time in months and leveraged shorts are building.

Nothing has broken yet, with the bigger trend line and the key 2900 futures level still below. But the setup is getting interesting: shorts are already large, CTA momentum is starting to turn and Russell vol remains surprisingly contained versus rates vol. A break lower could get disorderly quickly, while a hold leaves plenty of fuel for a squeeze.