A Small-cap Renaissance?

JC Parets
August 9, 2022

Are you seeing Small-caps breaking out to new 4-month highs relative to Large-caps?

This underperformance in Small-caps began in Q1 2021 which, among other things, sparked the beginning of the bear market.

This week would mark the 18-month point, if a bear market is even something we're still in.

This kind of outperformance from Small-caps is not something we've seen over the past 18-months.

And as usual, for me it's less about "what" is happening, and more about "where" it's happening.

Small-caps are getting this outperformance going at exactly the 61.8% retracement of the entire rally from the ETFs inception in the Spring of 2000.

We saw a decade of Small-cap outperformance followed by a decade of underperformance.

What's the next decade look like?

Is this a new trend that's just getting started?

If, in fact, Small-caps do continue their underperformance, what does that say about this 18-month old bear market?

Can we move on now?

New Bull Market?

Small-caps outperforming?

You tell me. Let me know what you think!

We a have a fat list of opportunities right now in the current market that are actionable today.

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JC

 

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