If there’s one area of the market that still hasn’t woken up like it should, it’s small-caps.
Nobody wants them right now. The hate is real.
Bearish sentiment is building fast, and short interest in the Russell 2000 $IWM is at 18-month highs.
Investors are pressing their bets, leaning hard against these stocks. But when the crowd gets this aggressive, the unwind is rarely quiet.
Small-caps matter. They’re a real proxy for market breadth — covering everything from regional banks and biotechs to industrials and other under-the-radar names. And when they move, it usually means something bigger is brewing.
Look at the Russell 2000 vs. Russell 1000 ratio sitting right on long-term support.
If small-caps are about to enter a fresh period of outperformance, this would be a logical place for it to start.
Notice how every major bull run this century has seen small-caps leading — at least in the short term.
We think this time is no different.
Momentum’s been diverging positively for weeks now, with the 14-day RSI pushing higher even as prices grind lower.
If small-caps catch a bid here, it would be a big win for market breadth and overall market health.
We think it could happen anytime — and we want to be ready when it does.
That’s where our Minor Leaguers Report comes into play. We publish it every two weeks for ASC Premium.
Here’s this week’s table:
In this scan we focus on small- and mid-cap names between $1B and $4B in market cap — stocks with real breakout potential.
This is where the upside lives.
These are the names that can run 5x or 10x as they climb into large-cap territory.
We’ve seen this movie before.
When small-caps get going, they move fast — and they bring real market strength with them.
