“During this week’s broad market decline, the Russell managed to bounce strongly off its 200-day moving average. That line proved great support for the index last year, so this resilience is positive on a technical basis,” reports CNBC, citing Matt Maley, equity strategist at Miller Tabak. “The technical picture, coupled with an expected bounce in the U.S. dollar, says the Russell is an index that outperforms going forward.”
When looking at the price-to-earnings ratio and also accounting for inflation, the Russell 2000 is actually trading below its historical mean but still well within its historical one-standard-deviation band.
“The Russell 2000 index could be well-positioned going forward as it appears to be holding up better than its large-cap peers amid a broader market sell-off,” according to CNBC.
Small-cap bull markets have lasted a median 698 trading days with a total median total index return of 106.8%. For the current bull market that started February 11, 2016, it has been 446 days with a total return of 57.6% as of November 15, 2017.
For more information on the small-cap segment, visit our small-cap category.