Trend Signal Now: Is Small-Cap Leadership Back?

Monday, January 12, 2026

Is Small-Cap Leadership Back?

The little guys are back and they're leading the market higher.

The Russell 2000 $IWM just closed the week at its highest level in its history.

After nearly four years of going nowhere, it's finally breaking out of a massive base.

That kind of move doesn't happen in a narrow market. It happens when participation is broad and leadership is rotating.

And that's exactly what we're seeing right now.

Seeing the riskiest stocks in the U.S. make new highs tells you everything you need to know about investor risk appetite.

Even the relative picture confirms it: the Russell 2000 vs. Nasdaq 100 ratio is now at its highest level in 10 months.

I honestly can't think of a more bullish piece of evidence.

But the real question is:

Is this the start of a sustained run of outperformance for small caps over large?

Are investors ready and positioned for that scenario?

From where I'm sitting, the weight of the evidence suggests this is a move to take seriously.

If small caps are reclaiming leadership, it could mark a meaningful opportunity for investors.

We just released our latest Minor Leaguers Report:

The goal here is simple: identify the strongest names while they're still small and have serious upside potential.

We're talking up to 10x just to reach large-cap territory.

Join ASC Premium to get these trades, risk-free, and be ready to position yourself for the next leg of small-cap leadership.

Alfonso De Pablos, CMT

Director of Research, All Star Charts

Alfonso De Pablos, CMT | Director of Research, All Star Charts

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