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“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.” – Peter Lynch
The rally off of Monday afternoon’s low continues to roll on this morning as futures indicate modestly higher levels at the open. There’s quite a bit of economic data coming up throughout the morning, so that will impact prices in the short term. Jobless claims just came out and both initial and continuing claims came in well ahead of expectations. After the close, we’ll have a number of high-profile earnings reports from companies like Boston Beer (SAM), Capital One (COF), Intel (INTC), Snap (SNAP), and Twitter (TWTR).
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, the latest US and international COVID trends including our vaccination trackers, and much more.
It’s been an eventful four days for the Russell 2000. With declines of 1.2% on Friday and another drop of 1.5% Monday, the Russell 2000 came roaring back on Tuesday by surging 3%, erasing all of the declines from the prior two days. On Wednesday, the small-cap benchmark followed up with an impressive encore by tacking on another 1.8%.
Despite all the fireworks lately, the moves in the Russell 2000 have been a lot of sound and fury signifying in particular. As shown in the chart below, the Russell 2000 has been stuck in a sideways trading range since the beginning of February. The key level to watch in the short-term for small caps is the 50-day moving average (DMA), which for the Russell 2000 ETF (IWM) stands at about $224.70. If the index can break that level to the upside, it would be an encouraging signal, while a test and failure to take out that level would suggest more rough sledding ahead.