Small-Caps Are Showing Signs of Fatigue 🌤️ The Morning Print

Good morning! 

Small-Caps look to be running out of steam, with the Russell 2000 flashing a bearish momentum divergence.

Here's the setup.

Small-Caps have been one of this year's clear leadership groups.

The Russell 2000 just made new all-time highs last week, even as the S&P 500 has been relatively stagnant.

But while price printed higher highs, momentum continued to deteriorate.

The Relative Strength Index (RSI) has been making lower highs for months, creating a significant bearish divergence.

With IWM pulling back in pre-market this morning, that weakening momentum may finally be starting to show in price.

A group that has been a source of strength all year is now beginning to flash some near-term caution.

Now we'll see whether today's action confirms that shift, or if buyers attempt to step back in.