“From a seasonal perspective, this is a good window for small caps,” Kimble Charting Solutions said in a note Wednesday. “With them back at 2007 highs, we have to watch them closely … if they break the old highs, money flows should chase them.”
The chart below show the relative performance of IWM vs. SPY. When the chart is rising, it means small-cap stocks are beating the S&P 500. IWM has outperformed since mid-November.
Full disclosure: Tom Lydon’s clients own SPY and IWM.