Patrick Dunuwila profile image
Patrick Dunuwila

Chart of the Day - Monday, August 25, 2025

August 25, 2025


🏆 Today's Chart of the Day was shared by Alfonso De Pablos (@AlfCharts).
 

  • Small-Caps just posted their best week of the year relative to Large-Caps, as the Russell 2000 ($IWM) outpaced the Russell 1000 ($IWB) by +3.1%. Despite some giveback today, the ratio remains on track for its best month since November.
     
  • Over the past decade, Small Caps have erased their outperformance from the early 2000s. However, Alfonso notes, the ratio recently started to curl higher after tagging its inception lows dating back to the year 2000.
     
  • The long-term trend still favors Large-Caps, but the ratio has stabilized at a logical level. Weekly RSI shows a bullish momentum divergence, and with positioning still deeply negative for Small-Caps, a higher high in this ratio may not be far off.
     
The Takeaway: Small-Caps remain in a long-term downtrend versus Large-Caps, but the ratio has stabilized at support dating back to its inception lows. With improving momentum and lopsided positioning, the ingredients are in place for a sustainable reversal over the coming months.
Filed Under: