— Michael Kahn, CMT (@mnkahn) November 25, 2019
Today’s Chart of the Day was shared on Twitter by Michael Kahn (@mnkahn). It’s a daily bar chart of the Small-Cap Russell 2000 index ETF, $IWM. Michael points out that Small-Caps are breaking out from a key resistance level today. As you can see from the chart, the $160 level has been a brick wall for $IWM. Price tested and failed at this level several times this year. $IWM is still trading about 6% below the all-time high that it made in August 2018; however, today’s breakout is a big win for the bulls. Small-Caps spent the majority of 2019 underperforming their Large-Cap peers. This underperformance became a significant part of the bear case for US equities. Bulls typically want to see Small-Caps leading as it demonstrates risk-appetitie among investors. There’s not much resistance for $IWM until it reaches the former highs around $170-173. Last month, we highlighted the fact that Small-Caps tend to pick-up strength around this time of year. It seems as though the stars are aligned for Small-Caps to head higher in the near-term.