Chart of the Week - Big Moves in Small Caps
Chart in-focus from the latest Weekly S&P500 ChartStorm
Note: this is a new series for free subscribers and is intended to give an insight into the work that goes into The Weekly ChartStorm + provide a little further explanation on charts and concepts.
In terms of upsides and bullish-rotations, one area making big moves is small caps.
After retesting its big breakout earlier this year small caps have had a strong run.
And as previously outlined, small caps are trading on cheap valuations vs history (with good relative value vs bonds and vs large caps too).
Thanks in part to passive index investing and the primacy of big tech, small caps have become a neglected part of the market e.g. ETF market share (implied allocations) and rolling net-fund-flows for small caps are ticking up off record lows.
That is a classic contrarian bullish signal.
On that basis, along with cheap valuations and bullish technicals, small caps likely have plenty of room to run from here (and offer a bright spot amongst the bearish banter).
Bottom line: small caps have room to run in their new bull market.
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ICYMI: 10 Charts to Watch in 2026 H2 Outlook…
For paid subscribers only, check out the 10 Charts to Watch in 2026 with freshly updated data and revised commentary on the outlook (where are the risks, what are the opportunities, how to navigate the next phase of the cycle)
10 Charts to Watch in 2026 [Half-Time Update]
![10 Charts to Watch in 2026 [Half-Time Update]](https://substackcdn.com/image/fetch/$s_!NRSa!,w_1300,h_650,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0f3e529e-5ca5-4d18-939e-81c5f95583d2_890x607.png)
This “Off-Topic ChartStorm” provides a Half-Time Update to my 10 Charts to Watch in 2026 — and provides a good opportunity to think about H2 and beyond.
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Best wishes,
Callum Thomas
Founder & Editor of The Weekly ChartStorm
and Head of Research at Topdown Charts
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