Despite dramatically underperforming all major indexes throughout 2023, the Russell 2000 small-cap index has begun showing signs of accumulation. The Up/Down volume ratio in the chart below identifies net buying over a 50-day period with a value greater than 1.0. As you can see, all prior corrections occurred with an associated drop in the Up/Down volume ratio below 1.0. This recent May correction had a different character and occurred with a backdrop of the ratio holding above 1.0. Coincidentally, legendary investor Stanely Druckenmiller just recently disclosed his new largest position to be call option on the Russell 2000.
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