Chart of the Day – Thursday, July 11, 2024

$IWM best day vs $QQQ since 2001 pic.twitter.com/6Yr7amGsrD

— Mike Zaccardi, CFA, CMT (@MikeZaccardi) July 11, 2024

Today’s Chart of the Day was shared by Mike Zaccardi (@MikeZaccardi).

• Today was a tale of two markets as Small Caps and Large Caps aggressively moved in opposite directions.

• The Russell 2000 ($IWM) had its best day since October, rising +3.57%, while the Nasdaq 100 ($QQQ) had its worst since October, dropping -2.19% from a record high after rising for seven consecutive days.

• Mike points out that $IWM outperformed $QQQ by nearly +6% today, marking the widest spread in more than two decades. This ratio reached an all-time low yesterday, but today’s historic move suggests a potential reversal.

The takeaway: The Russell 2000 ($IWM) outperformed the Nasdaq ($QQQ) by the widest margin since 2001 today. This could start a healthy rotation into Small Caps as the Nasdaq digests its recent gains.