Where are we going Russell?

I’ve been watching the Russell 2000 (small-cap index) and something feels different this time.

It’s pushing into new highs and the setup suggests we might be on the verge of a real breakout. I’m talking about +20% upside in the coming weeks or months, and not as a distant dream, but as a plausible scenario.

For years the market has toyed with the “Magnificent 7” and passive funds dumping money into the same handful of stocks.

Small-caps were left behind.

But when so many assets are crowded into a few names, it only takes one meaningful shift for the tide to turn. I’m seeing early signs that investors might finally rotate out of mega-caps and into the under-owned smaller stocks. If that happens, the Russell could catch a strong tail-wind and lower Interest rates are also important for Small caps.

On the flip side, I’m keeping one ear open for red flags. If the breakout fails, say, due to a macro twist (rates stay high, growth slows) or passive flows reverse back into large caps, then this move could turn into a bul trap. The chart is showing potential, yes, but momentum can evaporate just as fast if volume doesn’t follow or support this breakout.

So here’s how I’m playing it: I¡ve bought the Russell above that resistance zone, expecting a +15 to 20% move. If instead we see a heavy rejection and roll-over, I’ll be ready to step aside and change my mind. Small-caps are exciting territory, but also unforgiving if the thesis collapses.

This could be the moment when smaller stocks shine again. Or it could be the moment the market reminds us how tricky false breakouts are.

What is your vision in RUSSELL ?