Small and mid-caps’ recent lag has been turned on its head following strong gains in yesterday’s session. Whereas most of these have been at neutral over the past week, today only the Micro-Cap ETF (IWC) has not moved into overbought territory, although it has gotten close to doing so. Small and mid-caps have seen the largest gains over the past five days and have also seen significant moves within their trading ranges as shown through the long tails in the Trading Range section of our Trend Analyzer snapshot below.
Looking at the charts, yesterday’s strong session for small and mid-caps is evident. Mid-cap ETFs like the Core S&P Mid-Cap ETF (IJH) have broken out above resistance to reach new highs. Meanwhile, small-caps like the Russell 2000 (IWM) and the Core S&P Small-Cap ETF (IJR) have broken out of their short term and a longer-term downtrends. IWC on the other hand still needs to push a bit higher to do the same. Large caps did not see as explosive of a move but the S&P 500 (SPY) and Nasdaq (QQQ) also managed to clear resistance to finish yesterday at new highs.
In the past week, it has mostly been more cyclical sectors that have led the way higher with Materials (XLB), Financials (XLF), Industrials (XLI), and Tech (XLK) all gaining well over 2%. On these moves, these ETFs have reached overbought levels. At the same time, defensives like Consumer Staples (XLP), Real Estate (XLRE), and Utilities (XLU) have fallen the most as they mean revert off of overbought levels. Start a two-week free trial to Bespoke Institutional to access our interactive Trend Analyzer, Chart Scanner, and much more.