On The Fly: Weekly technical notes for Russell 2000

The Russell 2000 (RUT) saw a minor pop higher this week after Trump administration officials suggested plans for infrastructure and tax reform were close to being ready. That news helped revive some of the so-called "Trump Trade" stocks. The move higher was not enough to break the index out of its recent downtrend. It remains mired in a quite distinct consolidation phase of 1350 at the low and 1400 at the high, with the 1380 area a notable intermediate upside objective. The geopolitical mix that has impacted assets on the large cap side is just as significant for the small caps, but this index has the added problem of needing to see real results soon from the administration to justify the bid-up. The Russell 2000 earnings calendar continues well-past that of the S&P 500, so there is additional tail risk ahead. For the week, the best-performing sectors in descending order were the Industrials, Consumer Cyclicals, Financials, Technology, Telecommunications Services, and Basic Materials. Energy, as with the S&P 500, was the weakest sector.