Russel 2000 has currently reached is standard 2 deviation as a comparison to the pricing of s&p.
What this means is that currently the S&P price has increased so much over the Russel that recently it has deviated from it average +2 standard deviations.
At some point in time price will inevitably return to its average.
This could mean one of two things.
The s&p price declines more rapidly then Russel.
S&P does not increase in price as much as the Russel therefore underperforming the Russel causing the comparison to revert back to its average.
Last time such a miss price allocation happened lead to one of the biggest bear markets in recent history.
In 2000 the slow climb up with the SPX slowly rolling over and a big spike in Small cap quickly sent the SPX/RUT comparison plumet back down from its +2 to its +1 standard deviation within a short time period only to spike back up. (White arrows on the chart)
Something of the sort has happened recently.
What this means is that currently the S&P price has increased so much over the Russel that recently it has deviated from it average +2 standard deviations.
At some point in time price will inevitably return to its average.
This could mean one of two things.
The s&p price declines more rapidly then Russel.
S&P does not increase in price as much as the Russel therefore underperforming the Russel causing the comparison to revert back to its average.
Last time such a miss price allocation happened lead to one of the biggest bear markets in recent history.
In 2000 the slow climb up with the SPX slowly rolling over and a big spike in Small cap quickly sent the SPX/RUT comparison plumet back down from its +2 to its +1 standard deviation within a short time period only to spike back up. (White arrows on the chart)
Something of the sort has happened recently.
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Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.