Small Cap Large Cap Divergence

$IWM $QQQ

There’s been a subtle shift in performance in the small caps vs the megas recently -

This could be accentuating due to the “Mag 7” reporting this week ($GOOGL weaker today), but it begs the question of whether small caps are poised for a period of outperformance versus their larger counterparts.

This isn’t to say they have to go up while the others are going down, but could just go down less.

Finally, here’s a look at the small caps versus the mega’s. At a familiar point in this ratios history, it looks like it’s poised for a bounce here.