🔎 Watch the Mid Caps

Large caps have been steadily outperforming in U.S. markets, even as growth stocks led the most recent leg lower.

But in a market like this, flexibility is everything. We need to stay nimble and open-minded—ready to give a variety of investment themes the benefit of the doubt.

Europe is a prime example. After over a decade of going nowhere, it’s finally giving the U.S. a serious challenge.

Back in the U.S., one area that's quietly caught our attention is mid caps—the often overlooked middle child of the size spectrum.

Relative to large caps ($SPY), mid caps ($MDY) are digging in at a critical support level. It’s a key battleground.

If this level holds, we could see renewed strength in the mid-cap space. But if it breaks? It may set the stage for a deeper rotation down the cap scale—into small caps—as markets look to find their footing after the recent correction.

As Europe is proving right now, leadership is up for grabs. The winners of the next leg higher may not look like the winners of the last.

Now is the time to watch closely.\

The market is shifting—and so should we.