The Week in Russell 2000 Trading – 8/3 – 8/7

The Russell 2000 (RUT) was down 2.57% last week, over twice the drop that occurred in the large cap focused Russell 1000 (RUI). This puts large cap stock performance solidly in the lead relative to small caps in 2015. For the year RUT is now up (a strong word for this) 0.18% while RUI is up 1.25%.

RUT - RUI

We saw a strong move in the relationship between small cap and large cap volatility last week. Probably the best way to measure this is to compare the CBOE Russell 2000 Volatility Index (RVX) with VIX which appears below. The last time the RVX / VIX premium closed over 30% was on April 27th of this year. This reading stayed relatively high for some time, but drifted lower after a couple of weeks. Probably of more interest to the majority of traders is that from that date until early June small cap stocks underperformed large cap stocks based on the performance of Russell 2000 versus Russell 1000.

RVX VIX