Russel 2000 vs Nasdaq, important moment
This is essentially a momentum play where we're seeking a breakout in the Russell 2000 (RUT) compared to the Nasdaq, signifying relative overperformance and potentially paving the way for new highs on the S&P 500 (SPX).
It's important to note that a rejection at this juncture would indicate a bearish signal. However, from a pattern probability perspective, the outlook appears bullish. Even though we're currently at all-time high (ATH) levels, this aligns with historical trends from the year 2000, and the prevailing inflationary period suggests the possibility of reaching even higher highs in the future, unless we breakout on the yield curve inversion and have the bear steepener event (see my other charts) that could very well align with the resistance we have here and failing a monthly breakout we can experience a bull trap. Only a monthly close above is a strong buy signal.
It's important to note that a rejection at this juncture would indicate a bearish signal. However, from a pattern probability perspective, the outlook appears bullish. Even though we're currently at all-time high (ATH) levels, this aligns with historical trends from the year 2000, and the prevailing inflationary period suggests the possibility of reaching even higher highs in the future, unless we breakout on the yield curve inversion and have the bear steepener event (see my other charts) that could very well align with the resistance we have here and failing a monthly breakout we can experience a bull trap. Only a monthly close above is a strong buy signal.
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