Monday could prove to have been a very big day for the markets after the Russell 2000 (via IWM) showed its first sign of life for 2021. The index managed to take out the 'bull trap', and break to a new closing high. Volume climbed to register as accumulation.
The breakout in the Russell 2000 finally switched the relative performance away from Large Caps back in favor of Small Caps. While this shift isn't the best news for the S&P, the latter's breakout remains intact and technicals are net positive. The S&P has done much of the legwork over the course of 2021 so now is a good time for change.
The NASDAQ added to its breakout yesterday, although it has enjoyed a sequence of up days without offering any form of consolidation. Technicals are net positive although buying volume is light.
The index is also losing relative ground to the Russell 2000, although not to the same degree as the S&P. The swing low in October marked a successful test of support established at the start of 2021, so it now has a chance to benefit from what has been a more measured advance for the index.
The week has started well, now it just needs to continue. I have waited for most of 2021 for the Russell 2000 to make its move and now it has. If the Russell 2000 leads of the indices into a 'Santa Rally' then we could see a very positive finish for the year.