Chart of the Day - Thursday, February 24th, 2022

Today’s Chart of the Day was shared by Steve Strazza (@sstrazza). The Russell 2000 began today in bear market territory, down more than 20% from its all-time highs. It has been the worst-performing major index, but Steve points out that it's currently attempting to carve out a near-term bottom. For starters, it's the only major index that is holding above its January lows. It's also finding support at the Volume Weight Average Price, anchored to the Covid lows (blue line). In other words, this blue line represents the average price that buyers and sellers have transacted at since the Covid low. Lastly, momentum is diverging positively, with RSI failing to reach oversold conditions below 30. As we know, Small-Caps tend to lead the broader market higher or lower, so if the Russell can continue to hold up for the remainder of the week, then stocks could see some sort of relief rally next week.