The Russell 2000 ended a streak of 363 trading days of closing above its 200-day moving average (DMA) today after declining 1.6%. Today was the fourth time in the last 15 trading days that the index traded below its 200-DMA, so at some point it was bound to close below that level too. You can only get bailed out by an afternoon rally so many times.
Since the Russell's inception in 1978, the most recent streak of closes above its 200-DMA was the third longest in the index's history. The two longest streaks weren't much longer either at 375 and 371 trading days. Last week, we sent out a report to Bespoke Premium clients detailing how the index performed following prior streaks where the index first closed below its 200-DMA after not having done so in more than 200 trading days. Clients that wish to view this report can click on the link below. If you are not currently a client and would like to subscribe, sign up for a 5-day free trial today!