If This Happens Stocks Will Continue To Move Higher
Since the 2018 Christmas plunge when stocks bottomed after a horrendous fourth quarter, small cap stocks (Russell 2000) have consistently lagged the rest of the market.
While the S&P 500, DJIA and the NASDAQ trade at all time highs the Russell 2000 (RUT) is now threatening to join the party.
If small cap stocks break out it would mean that the rally in stocks is broadening across more sectors/industries. If this happens we could have a rip-roaring bull market on our hands.
Healthcare, Financials, Industrials and Information Technology are the four largest sectors in the Russell 2000 making up over 65% of the index. Stocks within these sectors will be the one's to watch if this rally is going to continue to pick up steam.
One of My Favorite Setups
Alphabet Inc. (GOOGL) has been on a very nice run lately. After watching the stock trade in a wide range for nearly two years price finally broke out. However, this time it broke out above prior overhead resistance and successfully held above for nearly a month testing 1280/1300 numerous times.
These unsuccessful attempts to break back below prior resistance, now support, was a very good indication that price was ready to make a new leg higher and that's exactly what happened. GOOGL is up around 15% since.
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