Russell 2000 Hits a Make-or-Break Level: Buy or Sell?
Small caps have reached a critical point, which will determine their direction going forward. After months of investors shifting towards undervalued assets, the Russell 2000 has reached an important technical point, while macroeconomic forces, including war, energy disruptions, and decreased access to funds, threaten to end the market uptick.
The market began to rotate toward unloved assets back in October and through to the end of February, including small caps like the Russell 2000. But war breaking out in the Middle East has eroded market breadth, squashing the small-cap rally. Now, small caps are approaching a technical line in the sand that could act as a hard resistance and thus a good buying opportunity for investors willing to wait out the uncertainty of the moment.