As the broad equities market pushes toward new highs, riskier assets like small-caps have been able to rally back much quicker. When the economy is doing well and the markets rally, we see sentiment for more nimble smaller companies improve and outperform those of their more languorous, larger peers.
SEE MORE: Treading Carefully With Small-Cap ETFs
“There is also a small possibility that the main decline could begin even before the pattern is technically complete. That type of truncation of pattern can happen at major highs and major lows, especially when there is already divergence among different stock indices. Therefore, it will be important to monitor IWM price behavior at more than one resistance area,” adds See It Market.
For more information on the small-cap segment, visit our small-cap category.
Tom Lydon’s clients own shares of IWM.