Russell 2000 Not Confirming New S&P 500 Highs

February 7, 2011 at 11:58 am  ·  Category: Market Commentary, Technical Analysis

Here’s a chart comparing the performance of the Russell 2000 index of small cap stocks to the S&P 500 since the beginning of the bull market on March 9, 2009:

russell-vs-sp-since-march-6-09

As you can see, the Russell 2000 has notably outperformed the S&P 500 over the course of this bull market.

Now here is a chart of the Russell 2000 versus the S&P 500 since January 18, 2011 – the last three weeks:

russell-vs-sp-since-jan-18-11
The Russell has underperformed the S&P by 2% over the last three weeks since the selloff on Wednesday January 19, 2011.

Indeed, while the S&P is now about 20 points above its closing high from Thursday, January 27 – the day before the Egypt selloff – the Russell – at 809 – is currently only about a point above its bull market closing high from Tuesday January 18.  In other words, the S&P has broken out to the tune of 20 points in the last week plus today while the Russell has not.  It is still right at resistance.

Michael Kahn noted the same thing a couple weeks ago: “Lagging Small Caps A Big Concern”, Getting Technical, Barron’s, January 26, 2011.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 
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