Stuck small caps

The small-cap Russell 2000 is getting hit again today, and continues its under-performance against most other indexes. Even so, the index has gone essentially nowhere for 5 months.

Bulls will say this is healthy consolidation. Bears will assert it's dangerous chop before a fall.

Historically, it's hard to make a strong case for either. The table below shows every similar 5-month bout of consolidation when the index closed at a 52-week high at some point during its 5-month range. All of these showed essentially flat 5-month return, with a high and low within those 5 months that never traveled more than +/- 7.5%.

If we zoom in on the last 20 years, then it starts to favor the bears a bit more. Only 2 of the 8 signals, in December 2005 and March 2018, preceded strong and consistent gains through the medium-term. Both did end up giving much of those gains away longer-term, so there's that.