Small-cap and micro-cap stocks are breaking out to new all-time highs after being in a holding pattern for 10 months, which includes the Small-Cap Russell 2000 Index, the S&P Small-Cap 600 Index, and the Russell Micro-Cap Index. These small-cap and micro-cap indexes have gone nowhere for almost a year, and now they are finally breaking out to all-time highs.
Along with the breakout in small caps confirming the S&P 500’s new high made this week, the Dow Transports have also broken out to new all-time highs.
In the charts below, each small-cap index ETF is currently trading well above its 50-day (blue line) and 200-day (red line) moving averages.
Here's a chart of the iShares Russell 2000 Index ETF:
Here's a chart of iShares Core S&P Small-Cap Index ETF:
Here's a chart of the iShares Micro-Cap Index ETF:
The weight of the evidence clearly indicates this breakout of small company stocks to all-time highs is a bullish (not a bearish) development for the long-term, well-diversified investor.
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