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The small-cap Russell 2000 index, which is made up of the smallest 2,000 companies in the broader Russell 3000 by market capitalization, on Tuesday achieved what technicians call a “golden cross,” with the 50-day moving average above the index’s 200-day moving average.
The 50-day moving average is seen as a representation of an asset’s short-term price trend, while the 200-day average measures the long-term trend. A golden cross is usually viewed as a bullish signal, where an uptrend is strengthening.
The small-cap gauge
RUT,
50-day average hasn’t closed above the 200-day average since January 25, according to Dow Jones Market Data. The last time Russell 2000 saw two golden crosses in a year was in 2019.
Russell 2000 achieves a golden cross.
Source: FactSet, Ken Jimenez
Based on data dating back to 1987, Russell 2000 gained an average 2% and 4.3%, respectively, in three and six months after a golden cross, according to Dow Jones market data.
Russell’s performance has been lackluster compared to its peers, rising just 8% so far this year, versus a 15% gain for the large-cap index S&P 500
SPX,
and a 31% rally for the tech-heavy Nasdaq Composite
COMP,
–Ken Jimenez contributed to this report.
