Thursday's Market Minute: Small-Caps Soaring As Russell 2000 Blasts Off

The coil that’s been winding up for almost all of 2021 finally seems to have sprung as Russell 2000 futures made a major upside push yesterday. The small-cap index contract had long been the holdout in terms of reaching new all-time highs, and it finally did so while notching a 1.7% gain yesterday that brought its total advance to +6.6% since the Oct. 27 close. Now that the Russell (typically more reflective of risk-on sentiment than its peers) has joined the party, are equities in for another melt-up?

The /RTY bounced around in an increasingly narrowing triangular range most of the year, and yesterday’s burst upward broke through June’s double-top resistance and March’s all-time highs, as well as the yearly Linear Regression Line. The move happened on volume above its own 50-day Simple Moving Average on a large green candle closing near the highs of the days, which suggests greater conviction on the part of bulls. The close also happened above the upper Bollinger Band, which is also usually interpreted as bullish.
It can be difficult to gauge potential resistance when a product is making all-time highs, but the yearly one-Standard Deviation Channel and the Linear Regression 50% Channel can provide some upside clues. Based on these indicators, watch the zone presently between about 2520 and 2546. For support, traders may be watching the yearly Linear Regression Line, now near 2360. Beyond that, another key point could be the previous area encompassing the old all-time highs & double-top resistance near 2345.