From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.
We continue to pound the table on leadership down the market-cap scale. There’s been strong evidence over the past few weeks/months suggesting this is a structural trend reversal in the large vs small-cap ratio.
Many key indexes – both large and small, sit at crucial inflection points. Many of the small and mid-cap indexes are also extended and sporting extreme momentum readings, making for a logical level for sellers to step in.
It would be a healthy development for SMIDs to take a breather here and pass the baton back to large-caps for a bit.