Chart of the Day – Friday, July 26, 2024

Small Cap Stocks $IWM have finally broken through the 3.5 year trendline against the S&P 500 $SPY pic.twitter.com/jyrTS6hElM

— Barchart (@Barchart) July 26, 2024

Today’s Chart of the Day was shared by Barchart (@Barchart).

• The Russell 2000 ($IWM) closed higher for the third consecutive week, gaining +3.4%. $IWM is up +11.6% during this period, marking its best three-week rally since November 2020.

• Its relative performance has been even more impressive. $IWM has outperformed $SPY by +13.7% over the past three weeks, marking its best three-week outperformance ever!

• As dramatic as it’s already been, this rotation is likely in its infancy. Barchart points out that the relative trend ($IWM/$SPY) violently broke a 3½-year downtrend line this week. There’s plenty of room for this to continue, considering it’s bouncing off a 24-year low.

The Takeaway: The Russell 2000 closed higher and outperformed for the third consecutive week. The relative trend broke a 3½-year downtrend line, setting us up for a Small-Cap Summer.