The Russell 2000 index is facing meaningful resistance, and market watchers say its next move could be a sign of what's to come for stocks.
div > div.group > p:first-child"> While the Russell 2000 small-cap index has lagged the major averages, still down more than 10 percent from its September highs, market watchers say its next move will be critical to where stocks go in the next few months.
But the Russell's recent flattening concerns Maley, who said the index is now pushing up against the 50-week moving average that it broke below in late 2018. "Now, the 50-week moving average provided unbelievably solid support in 2016, 2017 and through much of 2018," Maley said."Old support becomes new resistance, and we're bumping up right against that line right now. So, [if] it can break out above that line, ... it should be able to move nicely. If it fails again, it may roll over in a decent way.
"When we talk large caps versus small caps, the very first thing that we want to consider is what are the positive catalysts that could move stocks at this point?" Tepper said on the CNBC segment."The biggest one for me that jumps out is trade, and trade doesn't mean as much for small caps because they're conducting most of their business right here in the U.S."
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