— Alfonso Depablos (@AlfCharts) October 7, 2021
Today’s Chart of the Day was shared by Alfonso Depablos (@AlfCharts). The S&P 500 is having an above-average year, with very little downside volatility. However, the S&P 500 doesn’t really tell the full story of the stock market. When you look outside of Large-Caps and the S&P 500, this year has been a trendless mess. As Alfonso points out, Mid-Caps, Small-Caps, and Micro-Caps have all been rangebound for the majority of this year. While trendless environments like this can be frustrating, there is a silver lining to it. You could view this multi-month consolidation as healthy digestion, given the impressive rally that preceded it. Typically you’d expect this consolidation to resolve in the direction of the underlying trend, which in this case is higher. But for now, the trend outside of Large-Caps continues to be sideways.