Introduction
RTY has pulled back 2.15% from the 3,080 high and is now sitting on the rising 50 moving average at 3,002.3, which has tracked beneath this rally since April. The one time price traded below it was the early-August dip to 2,900, and that was recovered within days. The 200 moving average is far below at 2,760.4 and not in play. A close below 3,000 puts 2,960 in range. Holding the average keeps 3,080 as the target. There is a good case for the bulls here.
Small-Cap Positioning, in Context
- The Russell 2000 set a record close of 3,052.85 on 13 August, its 27th record of 2026. The index is up 23% on the year and leads the S&P 500 by 9.1 percentage points.
- Nearly 40% of Russell 2000 stocks carry floating-rate debt, making it the most rate-sensitive of the major benchmarks. September hike odds have fallen to roughly 35-40% following the jobs, CPI and PPI prints.
- The valuation gap remains wide. The main small-cap ETF trades at 19.21 times earnings against 29.32 times for its large-cap equivalent, a 34.5% discount.
The bigger picture: Warsh delivers his first Jackson Hole keynote on Friday, the same morning July core PCE is released and expected at 0.2% month-on-month. Small caps carry the most direct exposure to whatever that does to the rate path.
Possible Trades
Bullish continuation
- Entry trigger: daily close above 3,040
- Stop: below 3,000
- Target: 3,080
We are bullish on RTY above the 50 moving average, a break below that and we have to wait a few sessions and re look at price action.
Trading futures involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. This analysis is for informational and educational purposes only and does not constitute financial advice. Always conduct your own due diligence and consult with a licensed financial advisor before making any trading decisions.
