Small-Caps Break Out While Breadth Stays Constructive

Leadership broadened further as small-caps (IWM) pushed to fresh highs, while SPY held above a key breakout area and QQQ continued to churn beneath resistance. Breadth remained solid across short- and intermediate-term measures, with expanding new highs and only limited new lows, supporting the case for an intact uptrend despite some mega-cap hesitation.

Index overview (SPY, QQQ, IWM)

Short Term (Daily)

Long Term (Weekly)

SPY - Breakout holds, trend structure remains clean

SPY finished modestly higher and - more importantly - held above the prior breakout zone around ~689. On the daily chart, price remains above both the EMA9 and EMA21, which continue to slope upward. The action reads like digesting gains at the highs rather than distribution: shallow pullbacks, quick stabilization, and buyers stepping in near rising averages.

On the weekly chart, SPY remains in a positive long-term trend (trend indicator still green) and price is comfortably above the 30-week EMA, suggesting the primary uptrend is still the dominant force.

What I’m watching: whether SPY continues to accept above the breakout band (former resistance acting as support). As long as that holds, the path of least resistance remains higher.

QQQ - Sideways grind under resistance

QQQ also closed slightly green, but the daily chart still shows a range/consolidation under a well-defined resistance zone (the red supply band overhead). The EMA9/EMA21 are close together and price is hovering around them, classic “compression” behavior after a prior run.

On the weekly chart, QQQ is still in a positive long-term trend, but it’s clearly the least decisive of the three: price is pressing into overhead supply and progress has been slower compared to SPY and especially IWM.

What I’m watching: a clean reclaim/acceptance above the resistance area would likely re-accelerate leadership. Failure to do so keeps QQQ in “consolidation mode,” even if the broader tape stays healthy.

IWM - Clear relative strength and fresh highs

IWM was the standout. The daily chart shows a strong push to new highs, and price is extended above rising EMA9/EMA21, typical of a leadership leg. This is meaningful from a breadth perspective: small-caps participating (and leading) tends to be consistent with broader risk appetite.

The weekly chart reinforces that view: IWM remains in a strong positive long-term trend, and the breakout has created clear air above prior levels.

What I’m watching: after a strong extension, the next “healthy” development would be either (a) continued orderly grinding higher, or (b) a controlled pullback/sideways base above former resistance.

Breadth dashboard: steady-to-improving participation

Daily participation stays positive

• Advancing stocks: 58.1% vs 39.1% declining

• Strong movers: 4.4% up >4% vs 3.0% down >4%

This isn’t a runaway breadth thrust, but it’s consistently constructive: more advancers than decliners, and the “big move” bucket remains fairly balanced (slightly favoring the upside). That fits the price action: trend up, but not euphoric.

Trend participation is strong on shorter windows

• % above SMA(20): 73.1%

• % above SMA(50): 70.6%

• % above SMA(100): 59.7%

• % above SMA(200): 63.9%

The key takeaway for me is the stacking: short-term and intermediate-term participation remains strong, while longer-term measures are also on the right side of neutral. That’s a healthy “breadth backbone” supporting the indexes.

New highs expand, new lows remain muted

• New highs: 12.6%

• New lows: 1.1%

That’s a very encouraging combination. It suggests leadership is not only intact, it’s still expanding, while breakdowns remain contained.

What changed versus the prior session

Compared with Jan 14, breadth stayed broadly similar (still positive), but new highs expanded meaningfully (8.2% → 12.6%), which is exactly what I want to see when indexes are pressing higher. Meanwhile, the “>4% down” bucket remained controlled, and longer-window participation (week/month) stayed firmly tilted toward advancers.

In other words: the market didn’t need a huge up day to improve internally, it quietly broadened.

My read: trend intact, with leadership rotation as the tell

Putting it together:

• SPY is behaving well above a breakout level.

• QQQ is the lone laggard, still working through overhead supply.

• IWM taking the lead is a bullish “risk-on” signal.

Breadth metrics confirm the move is not narrow: strong % above key moving averages and expanding new highs.

The most realistic near-term risk isn’t “trend break” yet, it’s continued chop in QQQ creating headline-level hesitation while the rest of the market keeps grinding. As long as new lows stay contained and the SMA(20)/SMA(50) participation remains elevated, I’m inclined to treat pullbacks as digestion rather than damage.

Breadth trend rating (1–7)

Rating: 6 — Positive

Breadth is strong across multiple lenses (advancers > decliners, high % above SMA20/50, expanding new highs, very low new lows). I’m not pushing it to “very positive” only because QQQ is still range-bound under resistance and the “big move” buckets aren’t screaming momentum but the underlying participation is clearly supportive.

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Kristoff

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