{"id":65206,"date":"2023-07-19T01:35:45","date_gmt":"2023-07-19T08:35:45","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=65206"},"modified":"2023-07-19T01:35:45","modified_gmt":"2023-07-19T08:35:45","slug":"small-cap-stocks-add-pressure-to-bears-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2023\/07\/19\/small-cap-stocks-add-pressure-to-bears-the-market-breadth\/","title":{"rendered":"Small Cap Stocks Add Pressure to the Bears – The Market Breadth"},"content":{"rendered":"\n

I earlier claimed<\/a> that market breadth would only push higher with the participation of small cap stocks. Well the big moment of truth already arrived as the iShares Russell 2000 ETF (IWM) punched through its bear market line for the third time in 11 months. With the S&P 500 (SPY) and the NASDAQ (COMPQ) relentlessly pushing higher, IWM’s breakout adds yet more pressure to the bears. This milestone expands market breadth and further emboldens bulls and buyers. This move adds to the sense that the economic outlook is not nearly as awful as assumed for the last 12-18 months.<\/p>\n\n\n

\n
\"The
The iShares Russell 2000 ETF (IWM) ended 4 days of suspense with a 1.4% surge through its bear market line.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n

Note that even after IWM confirms its breakout with a follow-through buying and a higher close, it will immediately face resistance from the highs of the year set in February. Right after that hurdle, IWM will face resistance from the highs of last August. In other words, while IWM has almost traded straight up since nearly testing support at its 50-day moving average (DMA) (the red line above), I suspect trading in the next week or two going into and following the Fed meeting will be chopping and include false alarms both bearish and bullish. Still, the upshot remains that IWM’s achievements point to more overall upside potential in the stock market. The classic extended overbought rally<\/a> is back on the table.<\/p>\n\n\n\n