US2000 index is starting to shine as Q2 earnings season kicks off.
US2000 Weekly Analysis
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- The US2000 has charted a series of higher troughs (HT), followed by higher peaks (HP).
- This puts the small company index firmly into uptrend on a weekly trend basis.
- The gradient of the trendline has steepened from the green line to the orange line. This suggests that the US2000's upwards momentum is increasing.
- In this regard, we note that the momentum-based stochastic has moved into its upper quintile (green rectangle). If it maintains this position, the weekly chart will have an underlying bullish momentum and a higher index value is likely.
Comment
- The participation of the smaller company index in the bull market is important.
- It suggests that there is an optimism surrounding smaller companies. These typically have fewer financial facilities available to them and are thus in a sense closer to the economy.
- There had been some concern that only a few heavy hitters have powered the bull market.
- Therefore, the uptrend in the US2000 is regarded as good news as the contributing companies broaden out.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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