There was no doubt that new leadership emerged last week. Here were 3 areas that surged higher, either moving to fresh 52-week highs or breaking significant downtrends: Small Caps The small cap Russell 2000 (IWM) has been trying to clear the 210-211 area for the past two years. After doing so late last week, the IWM appears poised to make a run at its all-time high near 235: The really interesting part about small caps is that many traders don’t believe that they can perform well. They’ve underperformed for so long that short-term strength doesn’t feel sustainable. However, if you have long-term perspective, then you realize that recent weakness in the IWM is the outlier, not the norm. The bottom panel above shows the 10-year history of correlation between the S&P 500 and the Russell 2000. You can see that the overwhelming majority of time, the S&P 500 and the…
