This rotation into small caps and retail has been something many analysts have waited for.
And let’s face it:
- my Granddad of the Economic Modern Family just made a new 2025 high.
- The momentum is strong and above the Bollinger Band
- The Leadership clearly shows its outperformance over the SPY.
So, should investors be piling up on small caps?
Maybe, but always look left.
This is the weekly chart of IWM.
- The peak high was made in November 2021 at 244.46.
- Then, in November 2024, IWM made an all-time high at 244.98, just slightly higher than the 2021 peak.
- Now, in 2025, IWM remains 4% away from the all-time high.
That makes the 2021 and 2024 tops still double tops unless that area clears.
For now, with mom good, it is possible that IWM remains supreme.
However, as I say, the market is only as strong as its weakest link,
We must watch semiconductors (after Nvidia (NASDAQ:) earnings) and Transportation , still struggling.
If chips or transports go from weak link to an anchor, we could see IWM fall.
Back to the Daily chart, that is when we look at the July 6-month calendar range high as support or around 226.
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
The divergence between growth and value continues to widen
S&P 500 (SPY) 643 support
Russell 2000 (IWM) 226 huge support
Dow (DIA) 448 support
Nasdaq (QQQ) 575 now resistance with 560 huge support
Regional banks (KRE) Over the July calendar range so 64 key to hold
Semiconductors (SMH) Watch 293 as key to hold
Transportation (IYT) This is our weak link not even over the July range. Watch 73.50 to clear
Biotechnology (IBB) Was doing great until some political footballing happened-now a bit of a topping reversal
Retail (XRT) 84 pivotal and 82 key support
Bitcoin (BTCUSD) Broke under the 50-DMA so unless it climbs back over 114 could see a move down to 105
Educational purposes only, not official trading advice.