Chart of the Day - Tuesday, November 2nd, 2021

Today’s Chart of the Day was shared by Pratty Tulsian (@PrattyCharts). It's a daily candlestick chart of the Russell 2000 ETF, $IWM, over the past 2.5 years. It finally happened! The Russell 2000 just closed at an all-time high for the first time since March. As you can see, it spent the majority of the year consolidating in a tight range at the 1.618% Fibonacci extension of the March 2020 crash. Prior to this consolidation, the Russell had surged 145% in less than a year, so you could view this multi-month consolidation as a healthy digestion of those gains. This breakout is a positive sign for the broader market, as Small-Caps tend to lead the broader market higher or lower. It's also worth noting that Small-Caps have historically outperformed Large-Caps in the fourth quarter. The Russell 2000 has finally broken out of a 9-month base and looks poised for a new leg higher.