The iShares Russell 2000 ETF (IWM), which tracks small-cap stocks, has experienced a notable rally in August 2025, gaining approximately 8.2% so far this month, marking its best August performance of the century. The ETF is approaching a 52-week high and is less than 5% away from reaching all-time highs. This performance represents a 12% increase since the formation of a Golden Cross technical pattern. Compared to the S&P 500 ETF (SPY), IWM has outperformed, achieving a 6-month high relative to SPY and generating nearly 4.9% alpha in August 2025, its best monthly relative performance since July 2024. Market indicators also suggest a strong shift toward risk-on sentiment, with ratios such as EW Discretionary vs. EW Staples (RSPD/RSPS) and high-beta vs. low-volatility stocks (SPHB/SPLV) reaching new highs. Additionally, U.S. index ETFs across various market capitalizations, including SPY, QQQ, and IWM, are set to finish August in overbought territory, with small-cap stocks in extreme overbought conditions, trading more than two standard deviations above their 50-day moving averages.