IWM is made up of roughly 2,000 small-cap companies. When IWM is outperforming SPY, it usually tells me investors are becoming more willing to own smaller, riskier companies. That’s typically a risk-on environment. When IWM starts lagging SPY, the opposite is usually true. Capital is rotating into larger, more defensive names, which is generally a sign of risk-off sentiment. It’s an incredibly simple tool, but I’ve found it to be one of the most useful gauges of overall market risk appetite. #TheOracle