The Russell 2000 futures contract has been the laggard for much of the past year, underperforming the other three major equity indexes. This relative lack of participation among the small-caps, when coupled with macro factors such as the Trade War and slowing global economic data, raised some questions about the legitimacy of the rally. But the /RTY surged 2% yesterday, rocketing above the upper trendline of a congestion area near 1,600 that persisted for much of the month, and also taking out the previous yearly highs in one fell swoop.
At the same time, the pessimism surrounding the Trade War and global growth seems to be moderating, which seems to have caught bears flat-footed as the market continues to make new highs. Technically-minded traders watching the Russell should keep an eye on the MACD, which is approaching a bullish crossover, and the RSI, which is right on the verge of crossing into the overbought area. Additionally, the /RTY closed outside of the upper Bollinger Band, which is typically viewed as a sign of strength. However, if bulls begin to falter, the previous resistance near the 1,600 area seems a likely area to watch for support.
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