Chart of the Day - Tuesday, July 13th, 2021

Today’s Chart of the Day was shared by @DrStoxx. It's a chart of the Small-Cap Russell 2000 ETF, $IWM, over the past 9 months. The Russell 2000 has been lagging recently. It peaked in March and has been rangebound ever since. The index is still up a respectable 13.77% YTD, but it has resigned its stellar leadership from earlier in the year. At its peak in March, the Russell 2000 was outperforming the S&P 500 by more than 3x, but it's now underperforming the S&P, Dow, and Nasdaq YTD. @DrStoxx suggests that the Russell is a more accurate picture of the broader market environment because the market has been fairly narrow lately, with the majority of gains being attributed to a handful of Mega-Cap stocks. Heavyweights like, $AAPL, $MSFT, $AMZN, $NVDA, and $GOOG (all of which are not in the Russell) have been doing the heavy lifting for the other major indices in recent weeks, while the rest of the market has taken a breather. Generally, bulls want to see the Russell 2000 leading, as a sign of breadth and risk appetite. But, one could chalk this up to a healthy consolidation phase given how strong the trend was prior to this rangebound action.