July 15, 2021

Small-caps Lagging Large-caps

I've been posting on Twitter lately about how the Russell 2000 Index via the ETF IWM has been lagging behind the other major indices like the Nasdaq and S&P 500. Historically a lot of people believe small-caps are a leading indicator in the economy. It makes sense as they are one of the major employers in the country and a good gauge on the consumer. This inverse correlation has been going on awhile now. I think if the Russell goes down and breaks below this trading range it is a good signal that the majors will follow. I'm watching this.