The start of September brings in cooler weather, the start of the school year and many of our favorite pastimes: NFL Football. Whether you are rooting your team on to shoot for the Lombardi or are simply trying to avoid the toilet bowl (looking at you Jets fans) the NFL season brings everyone something to root for. More recently, online sports betting has aimed to make every play as exciting as the super bowl…  giving users the ability to bet on anything and create long-shot parlays (like the Saints winning back-to-back games this season…) on virtually anything. Whether or not there is a space for gambling related (or other “sin”) investments in your portfolio, the size of the online sports betting market is undoubtedly one that is growing quickly. Last year, Americans placed over 35 Billion dollars worth of legal bets on the 2024 football season, a figure that is only expected to grow as the industry continues to vow for decreased regulation.

An overall increase in more convenient sports betting has harmed more traditional gambling avenues. While several players of the industry have done their best to adapt, those areas more reliant on visitors traveling all the way to Las Vegas have struggled. Names like Caesars Entertainment (CZR) or MGM Resorts MGM have lagged behind their more virtual counterparts Draftkings DKNG or Flutter (parent of Fanduel) FLUT in terms of overall performance in 2025. Both DKNG & FLUT hold strong technical postures at the time of this writing, up over 17% & 11% so far this year respectively. DKNG sits on a string of four consecutive buy signals on its default chart, breaking back into a positive trend to start the summer and pulling back to old resistance around current levels. While thrusts reaching up into the high $40’s to low $50’s from the last few years have been tough points to crack, the odds seem increasingly likely that the 4/5’er will gear up to take on those points sooner or later.

To close out today’s piece, we look to answer the question of if increased eyes on the space seem to help out overall performance. To do so, we isolated Draftkings & Flutter performance both in and out of football season (defined as 9-1-2/15 of the next year.) The performance table is included below, comparing both against each other as well as the broader market over the same time frame. While the dataset is admittedly small (only six years) pure performance metrics fall in line with broader expectations. More often than not, these names tend to perform better in season than out of season. All this to say, sports betting names seem to be entering a “seasonally strong” part of the year with high relative strength- an idea which could warrant small positions within risk-on sleeves of your betslip (portfolio).

Wednesday’s Pulse in the Daily Equity Report highlighted a 99^th percentile single day outperformance over the S&P 500 Index (SPX). Even with Thursday’s pullback within equities, the Russell 2000 Index (RUT) continues to be the best performing US Equity index for the month of August but sits behind the Nasdaq-100 (NDX) in terms of Q3 performance.

This week’s action (8/8 – 8/15) brought the point and figure chart of RUT back to a buy signal and to challenge notable resistance at $2320. A move above current resistance would then bring the Index’s all-time chart high from November 2024 into play. While much of RUT’s recent improvement has come from a trending perspective and large caps still maintain their lead from a relative strength (RS) perspective, notable technical developments for the broader small cap space as of late are worth discussing.

Within the Asset Class Group Scores (ACGS) page – which evaluates asset class groups by utilizing the NDW Fund Scoring System and averaging the fund scores of all ETFs and mutual funds within a specific asset group - the recent rally within small caps have brought the Small Cap Growth, Blend, and Value groups back above the acceptable 3 score level for the first time since February. Prior to moving below 3 on the ACGS page earlier this year, each of the three small cap style groups scored above 3.0 for roughly 14 months. While investors will see if small caps can sustain this recent improvement relative to other equity indices, it is worth noting what sectors have contributed and examine the building blocks from a technical perspective.

Utilizing the ten Invesco Small Cap Sector lineup reveals notable performance from Discretionary (PSCD) and Materials (PSCM) during August, contributing to their moves up to the number 1 and 2 sectors for Q3. Given the headwinds provided by tariffs and the potential impact to both broader sectors, recent action for the stocks – possibly driven by earnings or other related factors – have somewhat “bucked the trend”, so to speak. While many may have perceived downside action due to doom and gloom around tariffs and other factors, small cap discretionary and materials stocks have witnessed positive action. The point and figure charts of both ETFs are shown below.

Invesco S&P Small Cap Consumer Discretionary (PSCD) – PSCD returned to a buy signal in the late April and shifted back into a positive trend along within an additional buy signal in July. This week’s action (8/8 – 8/15) brought a third consecutive buy signal with a double top break at $108 as shares rallied to $110. Following Tuesday’s (8/12) action, PSCD reversed into a column of Xs on its market RS chart, highlighting improvement from a relative strength basis by the ETF and increasing the ETF’s fund score up to 3.79 (as of 8/14). This marks the first time since February that the ETF has scored above 3, and the highest score since June 2024. After Thursday’s (8/14) action, PSCD maintains a Weekly OBOS reading north of 100%, meaning those who may be seeking exposure to the fund will look for a pullback to $104 on the chart before considering. Note resistance lies at $114 and $118, the November 2024 rally high, while support can be found at $100 and $96.

Invesco S&P Small Cap Materials ETF (PSCM) – On the default point and figure chart, PSCM reversed into Xs in early April and rallied to return to a buy signal in late July by breaking a double top at $77. July’s action brought the ETF back into a column of Xs on its market and peer RS charts, but the ETF’s fund score didn’t move above 3 until this week’s (8/8 – 8/15) action. On the trend chart, price action brought PSCM back into Xs and up to $77, forming a double top. Although not quite as extended as PSCD above, PSCM resides in overbought territory based on its Weekly OBOS reading (~90%) and a similar approach to adding exposure should be taken. Note resistance lies at $86, the all-time chart high, while support can be found at $73.

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