Really? How you know Russell topped and QQQ has not? Funny thinking. I got 180% return in 2021 and 20% up this year. What do I get to lose?
I think there might be some language difference. IWM consolidated for most of 2021 and everyone was expecting a massive breakout. We had a failed breakout which was the signal for a top. SPY & QQQ took another couple of weeks to catch up, but eventually also had a failed breakout.
Not sure what you talking about the breakout? Things had been falling the entire 2021. Look at ARKK. Look at all the IPO and SPACs. All were topping actions. Yes folks kept buying dips and we kept making records again and again. It was expected that stock markets would be in trouble when Fed starts to increase rates. Ask Larry Summers. Yet Mr. Powell waited all the time until he was re-nominated for Fed Chair. Look at the markets the day after his re-nomination. Market knew that is coming. Powell played Biden and played the markets well. All of this correct is over-due. More to come.
Also everyone should be able to read the markets in 2021. All the records were made on thin volume and low market participation. All were fueled by NASDAQ 100 by the dozens of large techs. Dangerous signs were all over the places. There was no breakout since there should never be any. The overall US stock market actually was very bad in 2021. There were more 52-week lows than 52-week highs. I'd expect more market corrections like NFLX's 23% drop. Even that is not enough.
Russell 2000 futures volume was rather high in 2021 at around 3.6 million / month. ave volume before 2019, was around 2.5 million / mth. NQ has quite a similar volume pattern.
Stagflation and the fact R2K consists of so many unprofitable names like around 40%. It was mainly a liquidity hausse and in a correction the least defensive positions get cut first in portfolios.
Why would Russell be impacted this more than QQQ with the stagflation? It does not have the high multiples than the QQQ has. As for the liquidation, why people want to sell the less liquid Russell first other than the more liquid large caps and Bitcoin? From what I see, Russell just follows Dow and QQQ to the toilet in the sell-off. And some people are worried about recession. At least now with the futures market, RTY outperforms NQ and ES. Hope this trend continues. I believe in the RTY outperforms NQ in 2022.
You just said stagflation is coming and nothing is wrong? Has the earnings for smaller companies grew? If they grew and the stock didn't move, that's a different story. In that case, the P/E should be very low.