Alright listen up — small caps are finally moving, and this is the real tell. While everyone’s still glued to mega-caps like they’re the only game in town, liquidity has quietly started flowing back into the places that actually reveal where the next leg is headed.
Breadth is expanding.
Risk appetite is turning.
Dips are getting bought instantly — not by retail, but by real money.
You don’t get small-cap strength unless liquidity is improving. That’s the whole story. Credit looks cleaner. USD is softening. Volatility is fading. These are all early-cycle signals, and small caps are reacting exactly as they should: with torque.
This is the first phase of rotation — subtle to most, obvious to anyone watching the underbelly. When liquidity rises, small caps lead. Not eventually. Immediately.
Don’t ignore this.