Rotation Into Small-caps & Mid-caps

Let's go over what's going on in this chart. On the y-axis on the left, we're plotting the Q1 drawdown. So the higher up on the chart it is, the better it held up in Q1 (Large-cap growth), while the lower it is on the chart, the bigger the drawdown in Q1 (Smalls, Mids & Micros).

Now, on the x-axis at the bottom, we're plotting the performance since September 2nd, which was when the S&P500, Nasdaq 100 and Dow Jones Industrial Average peaked. So the further to the right it is, the better it's done since early September (Smalls, Mids & Micros), while the further to the left it is, the worst is did since September 2nd (Large-cap growth).

The point of this chart is to show the rotation. We're not just getting "Sector" rotation, as we've been pointing out since July, we're now getting "Market Capitalization" rotation into the lower market cap stocks that we're so used to being underperformers.

That's no longer the case.

We'll chalk this up as further breadth expansion and healthy rotation, nothing we haven't already been seeing.

I dare you to explain to me how this is not the case.