The Russell 2000 (small caps index) just broke below its 50 daily moving average after spending a long time (58 days) above the 50 dma. In other words, the Russell 2000’s trend is starting to weaken after being very strong for a long time.
When the stock market loses momentum (i.e. right now), it tends to experience some more short term weakness before heading higher.
This is what happens next to the Russell 2000 when it falls below its 50 dma for the first time in 58 days.
This is what happens next to the S&P 500 when the Russell 2000 falls below its 50 dma for the first time in 58 days.
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The stock market will probably face some short term weakness in the next 1-2 weeks before heading higher. The stock market will probably rally throughout the rest of 2018 in a choppy manner.
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