{"id":329572,"date":"2021-08-24T13:10:00","date_gmt":"2021-08-24T10:10:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/mark-hulbert-heres-how-to-interpret-that-drop-in-the-russell-2000-below-the-200-day-moving-average\/"},"modified":"2021-08-24T13:10:00","modified_gmt":"2021-08-24T10:10:00","slug":"mark-hulbert-heres-how-to-interpret-that-drop-in-the-russell-2000-below-the-200-day-moving-average","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/mark-hulbert-heres-how-to-interpret-that-drop-in-the-russell-2000-below-the-200-day-moving-average\/","title":{"rendered":"#Mark Hulbert: Here\u2019s how to interpret that drop in the Russell 2000 below the 200-day moving average"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4133ad7c3a4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4133ad7c3a4\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/mark-hulbert-heres-how-to-interpret-that-drop-in-the-russell-2000-below-the-200-day-moving-average\/#Many_stock-market_technicians_believe_this_could_signal_a_shift_to_a_bearish_trend_%E2%80%94_are_they_right\" >Many stock-market technicians believe this could signal a shift to a bearish trend \u2014 are they right?<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/mark-hulbert-heres-how-to-interpret-that-drop-in-the-russell-2000-below-the-200-day-moving-average\/#The_same_is_true_for_the_S_P_500\" >The same is true for the S&amp;P 500<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/mark-hulbert-heres-how-to-interpret-that-drop-in-the-russell-2000-below-the-200-day-moving-average\/#Mark_Hulbert\" >Mark Hulbert<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Mark Hulbert: Here\u2019s how to interpret that drop in the Russell 2000 below the 200-day moving average<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Many_stock-market_technicians_believe_this_could_signal_a_shift_to_a_bearish_trend_%E2%80%94_are_they_right\"><\/span>\n  Many stock-market technicians believe this could signal a shift to a bearish trend \u2014 are they right?<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000384772\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000384772\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       CHAPEL HILL, N.C. \u2014 Small-cap stocks have not entered into a bear market.<\/p>\n<p> That\u2019s worth emphasizing because last week the Russell 2000 index closed below its 200-day moving average, after having been above it for several months. Many stock-market technicians believe that breaking the 200-day moving average indicates that the major trend could be shifting from bullish to bearish.<\/p>\n<div class=\"paywall\">\n       The Russell 2000\u2019s<br \/>\n        RUT,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598147\/delayed\" class=\"positive\">+1.88%<\/bg-quote><\/p>\n<p>        IWM,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209961116\/composite\" class=\"positive\">+1.90%<\/bg-quote><br \/>\n       history does not support that belief. On average over the last four decades, the index has performed no worse than average following such signals.<\/p>\n<p>Take what h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened last Sept. 23, when this small-cap benchmark closed below its 200-day moving average after having been above it for several months prior. Far from continuing to decline, the index responded to this bear-market signal by rallying strongly. It is today more than 50% higher than where it was then.<\/p>\n<p>Something similar might be taking place this time around as well. Since violating its 200-day moving average last week, the Russell 2000 index has rallied strongly\u2014and is now more than 3% higher.<\/p>\n<p>To be sure, these recent experiences constitute anecdotal rather than rigorous statistical evidence. But they are consistent with the historical record. <\/p>\n<p>This chart plots how the Russell 2000 performed since 1987 following days on which it closed below its 200-day moving average, after having been above it the day prior. On average over the subsequent six months, the index gained 3.75%. That\u2019s almost identical to the average six-month gain of 3.78% following days that are just the opposite\u2014days when the Russell 2000 closed <strong><em>above<\/em><\/strong> its 200-day moving average after having been below it the day before.<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:68.42857142857143%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-389927?width=540&amp;size=1.4628571428571429 540w, https:\/\/images.mktw.net\/im-389927?width=620&amp;size=1.4628571428571429 620w, https:\/\/images.mktw.net\/im-389927?width=639&amp;size=1.4628571428571429 639w, https:\/\/images.mktw.net\/im-389927?width=700&amp;size=1.4628571428571429 700w, https:\/\/images.mktw.net\/im-389927?width=700&amp;size=1.4628571428571429&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-389927?width=700&amp;size=1.4628571428571429&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-389927?width=700&amp;size=1.4628571428571429&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-389927?width=700&amp;height=479\" alt=\"\" title=\"\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\"><\/figcaption><\/figure>\n<\/div>\n<p>       The difference at the 12-month horizon is slightly larger: An average gain of 7.73% following first closes below the 200-day moving average, versus 8.31% following first closes above. However, even this difference is not significant at the 95% confidence level that statisticians often use when determining whether a pattern is genuine.<\/p>\n<p>Far bigger differences emerge when we compare all days after the Russell 2000 has moved above its moving-day average with all days after it has crossed below. In this case, the index\u2019s performance is much larger when it\u2019s below rather than above the moving average. That\u2019s just the opposite of what\u2019s presumed by the conventional wisdom.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"The_same_is_true_for_the_S_P_500\"><\/span>The same is true for the S&amp;P 500<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>You shouldn\u2019t be surprised by what I found for the Russell 2000 index since it\u2019s consistent with what\u2019s true also for the S&amp;P 500 index<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"positive\">+0.85%<\/bg-quote><span>.<\/span><br \/>\n       Consider an extensive study conducted a number of years ago by a research intern in my office. He calculated the performance since the mid-1920s of trading rules for the S&amp;P 500 based on the 200-day average, under a number of different assumptions\u2014and came up empty.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>For example, he found that, with realistic assumptions, a trading strategy based on the 200-day moving average failed to beat a buy-and-hold approach for many of the decades from the 1920s through the 1980s. Beginning in the 1990s, it lagged even under the most favorable of assumptions.<\/p>\n<p>Be careful how you put these findings into practice. Bear in mind that a bear market could begin at any time. The results presented here just mean that, if a bear market does begin in coming days, it won\u2019t be because the Russell 2000 index last week broke below 200-day moving average.<\/p>\n<p><em>Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>letters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com<\/em>.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Mark Hulbert\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/mark-hulbert\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/MktwHulbert\",\"text\":\"@MktwHulbert\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:contributors@marketwatch.com\",\"text\":\"contributors@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Mark_Hulbert\"><\/span>Mark Hulbert<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-75DF-04D177139143%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Mark Hulbert: Here\u2019s how to interpret that drop in the Russell 2000 below the 200-day moving average&#8221; Many stock-market technicians believe this could signal a shift to a bearish trend \u2014 are they right? CHAPEL HILL, N.C. \u2014 Small-cap stocks have not entered into a bear market. That\u2019s worth emphasizing because last week the Russell&#8230;<\/p>\n","protected":false},"author":1,"featured_media":329573,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-329572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/329572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=329572"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/329572\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/329573"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=329572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=329572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=329572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}