One Major Stock Index Isn't At Bottom
The Russell 2000 hit bottom on May 11 and is up 3.2% since then
When the market is in bad shape it’s natural to look for literally any indication that things might turn around. After all, who wants to keep losing money?
One way to look at the market is to realize that it’s just made up of a bunch of individual stocks and indices merely aggregate some collection of those stocks. While correlated, indices don’t move in perfect tandem and so we may see some positive developments in one part of the market that could suggest an underlying rally forming.
Amongst five of the major stock indices right now, if we had to look for hope, it might be in the Russell 2000, which has been up from the bottom it hit on May 11:
Now, this doesn’t really mean much as the Rusell 2000 could have a really terrible day tomorrow and blow up the underlying strength argument. But, when times are tough any piece of even just temporary good news is nice to hold on to!
From a quick look it seems like Russell 2000 ended up bottoming out later than SPY during the 2008 financial crisis. Obviously past patterns aren't guarantees of the future, but I'd be careful about buying into them just yet.