The small-cap iShares Russell 2000 ETF (NYSEArca: IWM) is outperforming SPDR S&P 500 ETF (NYSEArca: SPY) in May, which is usually a bullish sign for stocks in terms of risk appetite.

“The small-caps are performing well … with a new all-time high on the Russell 200o,” Investors Intelligence technical analyst Tarquin Coe said in a newsletter.

“The relative trend versus the big-caps turned up at the start of the month and is heading back towards the all-time high from March,” he said. “If equity markets were on the verge of topping out and rolling over, then the higher beta areas would not be providing the leadership which is currently evident.”

Breadth is also improving in small-caps with more Russell 2000 stocks in bull trends again following the April correction, Coe added.

For the year-to-date period, small-caps and the S&P 500 are neck and neck.

IWM has posted a total return of 16.6% so far in 2013, the same exact return delivered by the S&P 500, according to Morningstar.

Full disclosure: Tom Lydon’s clients own SPY and IWM.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.