U.S. Small Cap 3000 makes new ATH but U.S. Small Cap 2000 lags
U.S. Small Cap 3000 -
RUA
✅A new ATH breaking above the Dec 2022 ATH
U.S. Small Cap 2000 -
RUT
🚨Continues to demonstrate relative weakness
Light Blue by area on the chart 🔵
The U.S. small cap 3000 finally caught up with the other major indices such as the
SPX
and
NDX
as it previously has been demonstrating relative weakness failing to make new highs. That changed with the close of last week.
The U.S. Small Caps 3000 index is inclusive of the large cap 1000 Index. The 3000 index also uses market capitalization-weighted methodology. This means the larger 1000 companies have a greater impact on the indexes performance. This may explain why the 3000 index is out performing the 2000 small caps index by a wide margin. The Small caps 2000 is a better representation of the of small-cap stocks/businesses whose market capitalization is about $250 million to $2 billion
🧐 So the 1000 Large-Cap stocks direct the majority of the small cap 3000 index's performance. The heavy spearhead of the index is the 1000 large caps.
The S&P 500 Index tracks the largest 500 publicly traded companies, with exposure to 80% of U.S. stocks, compared to the U.S. Small Cap 3000’s 96% in U.S. Stocks
🧐 So the small caps 3000 index is a very concentrated index made up of primarily large U.S. stocks, even more concentrated by the S&P500
Divergence in Progress
On this chart you can see that in Dec 2022 the U.S. Small Cap 3000 index made a new high whilst the 2000 index made a lower high. This was a warning signal at the time that prices were about to roll over. This is not a guaranteed signal however it is something to watch out for and it appears to be in progress again at present. We can add it to our armory of risk indicators that can, when used in aggregate, help inform us of probable outcomes (not guaranteed outcomes). One would hope the Small Cap 2000 would base here or make a new high.
We can continue to watch these two indexes and see how they move together for an indication of things to come.
You can find this chart on TradingView and hit play to see how they are moving in lockstep.
PUKA
RUA
✅A new ATH breaking above the Dec 2022 ATH
U.S. Small Cap 2000 -
RUT
🚨Continues to demonstrate relative weakness
Light Blue by area on the chart 🔵
The U.S. small cap 3000 finally caught up with the other major indices such as the
SPX
and
NDX
as it previously has been demonstrating relative weakness failing to make new highs. That changed with the close of last week. The U.S. Small Caps 3000 index is inclusive of the large cap 1000 Index. The 3000 index also uses market capitalization-weighted methodology. This means the larger 1000 companies have a greater impact on the indexes performance. This may explain why the 3000 index is out performing the 2000 small caps index by a wide margin. The Small caps 2000 is a better representation of the of small-cap stocks/businesses whose market capitalization is about $250 million to $2 billion
🧐 So the 1000 Large-Cap stocks direct the majority of the small cap 3000 index's performance. The heavy spearhead of the index is the 1000 large caps.
The S&P 500 Index tracks the largest 500 publicly traded companies, with exposure to 80% of U.S. stocks, compared to the U.S. Small Cap 3000’s 96% in U.S. Stocks
🧐 So the small caps 3000 index is a very concentrated index made up of primarily large U.S. stocks, even more concentrated by the S&P500
Divergence in Progress
On this chart you can see that in Dec 2022 the U.S. Small Cap 3000 index made a new high whilst the 2000 index made a lower high. This was a warning signal at the time that prices were about to roll over. This is not a guaranteed signal however it is something to watch out for and it appears to be in progress again at present. We can add it to our armory of risk indicators that can, when used in aggregate, help inform us of probable outcomes (not guaranteed outcomes). One would hope the Small Cap 2000 would base here or make a new high.
We can continue to watch these two indexes and see how they move together for an indication of things to come.
You can find this chart on TradingView and hit play to see how they are moving in lockstep.
PUKA
