Chart of the Day - Wednesday, October 27th, 2021

Today’s Chart of the Day was shared by Jonathan Harrier (@jonathanharrier). It's a monthly candlestick chart of the Russell 2000 over the past six years. The Russell 2000 has been moving sideways for the majority of 2021, while other major indices have continuously made new highs. At this point, it really does feel like a never-ending story. However, Jonathan points out that this is healthy price action given that it surged 145% in less than a year prior to this consolidation. As we know, consolidations typically resolve in the direction of the underlying trend, which in this case is higher. Mid-Caps recently broke out of a similar multi-month consolidation, so it wouldn't be surprising to see Small-Caps do the same soon. It's also important to note that Small-Caps tend to outperform Large-Caps in the fourth quarter. If the Russell does eventually resolve higher, it has built a multi-month base to launch from, but until then, we wait...