Chart of the Day: US2000 (Russell 2000)
The US2000 is one chart that doesn’t need too much narrative, and where the bulls simply have to defend the 1455 level — or the risk is we head into the December lows. US small caps have outperformed the larger cap S&P500 since June 2018, which tells a story in itself. And for those who trade long/short strategies, the US2000/US500 ratio sits at the lowest levels since 2009.
For those who don’t trade long/short (or “pairs”), if we’re looking at a vehicle to trade pessimism, it generally pays to short the weakest equity index. The US2000 is that index, and a break of strong horizontal support at 1455 would accelerate the selling. It seems the greatest risk to markets is US President Donald Trump’s Twitter account. But after what we’ve seen from Trump in the past few days, a simple tweet that talks are progressing well won’t turn sentiment around. Traders are questioning the circuit-breaker and seeing few answers.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information provided here, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Ready to trade?
Get started with your Pepperstone account today.