Chart of the Day - Thursday, February 8, 2024

🏆 Today’s Chart of the Day was shared by Jake Wujastyk (@Jake_Wujastyk).

• The Russell 2000 ($IWM) outperformed by a wide margin today, gaining +1.50%, while the S&P 500 was essentially flat (+0.06%).

• Despite today’s strength, Small Caps have continued to struggle this year. $IWM is barely out of bear market territory (-19%), while the other three major indices are at all-time highs.

• Jake points out that $IWM spent the past six weeks coiling into a tight range or pennant pattern. As price moves toward the apex, pressure builds for an explosive move or trend in whichever direction it resolves. Given the prevailing uptrend, this continuation pattern should resolve higher. If it resolves lower, that will also be very telling.

The takeaway: The Russell 2000 ($IWM) led by a wide margin today despite its abysmal performance this year. After coiling into a tight range over the past six weeks, $IWM is primed for a large move or trend in either direction.