Little Giants

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As we head into year-end, I think it’s worth looking beneath the surface to see where real risk appetite is showing up.

And right now, it’s flashing in a place most people never bother to look: micro-caps.

These stocks have been ignored for years, lagging behind the broader market, but now they’re starting to participate.

Take a look at the iShares Micro-Cap ETF $IWC pressing up against fresh all-time highs.

These are the smallest publicly traded companies in America — the riskiest names in the entire market.

So when they start breaking out, it’s not noise. It’s a message.

If this move sticks, it’s exactly the kind of behavior you only see when investors are willing to embrace risk.

That’s not bearish — that’s classic bull-market character.

It also speaks to something even more important: broadening participation.

The tiniest stocks in the market are stepping up and joining the trend — exactly what healthy markets tend to do.

Let me know what you think — I’d love to hear your feedback!

Alfonso De Pablos, CMT

Director of Research, All Star Charts