⬤ The Russell 2000 has been crushing it lately, outpacing the S&P 500 for 9 straight days. That's not something you see every day. When small-caps go on runs like this, they tend to keep the party going for another 4 weeks or so. The track record backs it up—small-caps have beaten the S&P 500 in 10 out of 12 similar situations. So yeah, there's a decent shot we'll see more small-cap strength in the short term.
⬤ But here's the reality check: this doesn't tell us much about where things are headed long-term. When you zoom out to a 12-month view, the Russell 2000 and S&P 500 are basically even—it's a coin flip whether small-caps or large-caps come out ahead over a full year. The 9-day streak is exciting for traders looking at the next few weeks, but it's not a crystal ball for the next year.
⬤ The Russell 2000's current hot streak suggests small-caps have some juice left in the tank for now. History says the outperformance usually extends a bit longer after these 9-day runs. Just don't mistake a short-term edge for a long-term trend—small-cap dominance isn't guaranteed to stick around, and the annual performance split has been dead even historically.
