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Russell 2000 Is Now Retesting Its 200-Day Average

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Editor's Note: This article was originally published in John Murphy's Market Message on Friday, October 5th at 2:02pm ET.


Tuesday's message showed the Russell 2000 Small Cap Index being the first of the major market indexes to fall below its 50-day line, and warned that the selloff in small cap stocks might be a warning that the stock uptrend is losing momentum. Small caps continue to lead large cap stocks lower. Chart 5 shows the RUT falling today to its lowest level in four months and sitting right on its 200-day average. That's an important test for small cap stocks, and possibly for the rest of the market. Small caps have a history of leading stocks lower during market pullbacks and corrections.

Chart 5

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