Is Small Caps More Difficult?
What we notice from Small Caps Market Sentiment data.
Introduction
February has been a tricky month for small caps, and if you've been finding it harder to catch clean moves, you're not alone. We've seen more traders taking losses or struggling with choppy action, and the data explains why.
🔹 Volume is still high – February’s trading volume is on track to match January and December.
🔹 Fewer gappers – Despite similar volume, the number of tickers gapping up is noticeably lower.
🔹 Choppy conditions – With more traders piling into fewer plays, breakouts are failing faster.
⚠️ Why the Market Feels More Difficult
Looking at February so far, there haven’t been as many gappers compared to January or December, but volume is still on track to match previous months. This means that while the number of people trading remains high, everyone is crowding into the same plays.
When too many traders are focused on fewer tickers at the same time, directional moves become harder to sustain, creating more whipsaw action. We can see this reflected in the average percentage change, which has been more compressed than in previous months. More traders are active in small caps, but with fewer gappers, trading has become more difficult.
This doesn’t mean you should stop trading—but it does mean you need to adjust your expectations. Knowing this market shift gives you an edge over those still expecting January-style momentum. Instead of forcing trades, focus on quality setups and recognize when to dial back aggression.
All of this data, including ticker gap counts, volume trends, and market insights, is available in the dashboard, under market sentiment. Check it out to stay ahead of the curve and trade with an edge.
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