Small Caps Take the Lead as Breadth Holds Its Ground

Index overview – SPY, QQQ and IWM

Short Term (Daily)

Long Term (Weekly)

IWM

The standout (again) was IWM, closing at 257.8 (+1.2%) and pushing decisively above the prior consolidation zone. This is the kind of price action that often matters disproportionately for breadth because small caps tend to reflect “risk-on willingness” more directly. When IWM is breaking out while the large caps consolidate, it often signals rotation, not retreat.

Weekly IWM is also strong: up ~2.8% on the week so far, holding a positive long-term trend and pressing into fresh highs.

QQQ

QQQ finished at 625.58 (-0.32%) after a volatile intraday swing (a dip toward the lower area and a late recovery). Technically, it’s a pause under a clearly defined resistance zone, and while QQQ remains above its key moving averages, the inability to push cleanly through the upper band keeps this in “advance, then digest” mode rather than “breakout and run.”

Weekly trend remains firmly positive, but the message is similar: strong structure, but currently working through overhead supply.

SPY

SPY inched higher to 689.17 (+0.23%), continuing the familiar “two steps forward, one pause” rhythm near the overhead resistance band. Price remains above both the EMA9 and EMA21, which is typical for a market that’s still trending, but doing so while pressing into supply. In other words: bulls are still walking uphill, but the air is thinner up here.

On the weekly view, the long-term picture stays clean. The 30-week trend remains positive (green) and SPY is holding well above its rising long-term average—no structural damage, just digestion near the highs.

Breadth dashboard: still positive, just less “loud” than yesterday

Compared with the prior session (Dec 10), breadth cooled but did not crack:

• Advancers: 61% (down from 71.9%) — still a clear majority advancing, just less emphatic.

• Decliners: 35.8% (up from 25.6%) — normal giveback after a stronger day.

• Big movers (±4%): 4.0% adv vs 2.5% decl — fewer upside “thrust” moves than yesterday (6.8%), suggesting a calmer tape.

The more important “trend health” measures stayed strong—or improved:

• Above SMA(20): 71.8% (up from 69.7%)

• Above SMA(50): 57.7% (up from 55.9%)

• Above SMA(200): 61.6% (up from 60.7%)

This is a bullish configuration: short-term participation is high, and the longer-term participation is stable-to-rising rather than rolling over.

Leadership breadth also strengthened:

• New highs: 11.7% (up from 9.5%)

• New lows: 0.8% (down from 1.0%)

That combination - more stocks printing new highs while new lows stay pinned - is usually what you want to see during a consolidation near index highs.

Finally, multi-timeframe breadth stayed net-positive:

• Weekly: 62.6% adv vs 36.3% decl

• Monthly: 56.7% adv vs 42.5% decl

• 3-month: 52.5% adv vs 46.3% decl (a mild improvement vs the prior day)

And the “big swing” cohort remains slightly favorable:

• Adv +25% (3-month): 11.4% vs Decl -25%: 9.5%

Putting it together

Yesterday’s message was about breadth re-asserting itself; today’s message is about whether that strength can persist without constant fireworks.

So far, the answer is yes:

• The headline indexes are either grinding near highs (SPY), pausing under resistance (QQQ), or breaking out (IWM).

• Under the surface, participation remains broad, new highs are expanding, and new lows remain scarce.

The main “watch item” is not today’s softer advance/decline—cooldowns are normal—but whether SMA(20)+ stays elevated (ideally >65%), and new highs remain in expansion mode, especially if SPY/QQQ continue to press resistance.

If those hold, this looks like rotation and consolidation within strength, not distribution.

Breadth trend rating: Positive.

Breadth remains firmly constructive (high SMA(20)+, expanding new highs, very low new lows), even as the day-to-day thrust moderated and QQQ paused under resistance.

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Kristoff - ChartMill

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