Small-Cap Stocks Could Fall Another 20%

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Small-Cap Stocks Could Fall Another 20%

Weekly Small-Cap Stocks

This chart looks at the Russell 2000 over the past 30 years, during which time, it has spent the majority of that time inside of rising channel (A).

The chart shows that the long-term trend in small caps remains higher. Weakness this year has it testing rising support tied to the 2009 lows at (1).

If the Russell breaks below support at (1), it could work its way – over time – into channel support at (2), which is currently about 20% below current prices.

Bottom Line

An important test of support for small-cap stocks is currently in play.

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