Chart of the Day - Wednesday, November 6, 2024

Patrick Dunuwila
November 6, 2024

Chart of the Day


🏆 Today's Chart of the Day was shared by Jason Goepfert (@jasongoepfert). 


  • The Russell 2000 ($IWM) gapped higher by +5.5% this morning as election uncertainty evaporated from the market. It closed higher by +5.8%, marking its best day since May 2020. 
     
  • Jason points out that today's upside gap was the fourth-largest in $IWM's 24-year history. While 2008 was a nasty exception, $IWM has historically been much higher three months after an upside gap of +5% or more.   
  • The next few days and weeks have leaned bearish. However, three months later, $IWM was higher 80% of the time for a median gain of +20.5%. Seasonality also favors $IWM in the coming months, as Small Caps have historically *outperformed* Large Caps from now until March. 
     

The Takeaway: When the Russell 2000 ($IWM) opens higher by more than +5% like it did today, it has historically gained a median of +20.5% over the next three months. 

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