Chart of the Day - Tuesday, October 29th, 2019

Today’s Chart of the Day was shared on Twitter by Linda Raschke (@LindaRaschke). It's a weekly bar chart of the Small-cap Russell 2000 index, going back three years. The Russell 2000 is the only major index that hasn't reached a new high so far in 2019. The index spent the majority of the year chopping back and forth in a sideways trading range while underperforming its Larger-cap peers. Small-cap underperformance has been a concern among bulls this year and became a big part of the bear case for US Stocks. Linda points out that the index is currently testing the upper bounds of its trading range. Last week, we explained that Small-caps have a seasonal tendency to begin outperforming Large-caps around this time of year.  If Small-caps can break out and begin to outperform Large-caps into the end of the year, it would be a big positive for the broader market.