Russell 2000 continues its advance

The Russell 2000 advanced on the second day after its breakout.  Volume climbed to register as distribution with technicals net positive.  All indices gained, but relative performance of Small Caps remained ahead of Large Cap indices. The current rally gives the index some leeway when it comes to consolidating the breakout (and a probable breakout support test). 

The Nasdaq added another 1% - also on higher volume accumulation - as the rally maintained its run off the October swing low. The gain was enough to reverse the relative performance advantage over the Russell 2000, although both indices are performing strongly. 

The S&P didn't quite add 1%, but it already has a well established breakout.  The index is underperfroming relative to both the Nasdaq and Russell 2000 but this is not too damaging for the index as this time - particularly as bullish seasonal factors will becoming into play. 

While we are seeing a shift in relative performance, we have a scenario where all indices are gaining and it's just to what extent each are moving relative to one another.  While it's unlikely these advances will be maintained without some back test of breakout support it is looking more likely we will have a strong finish into the end of year. 

You've now read my opinion, next read Douglas' blog.

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