Tuesday, April 05, 2011

Stock Market - Small Caps Lead The Way

Above is a daily chart of the Russell2000 small cap index and as you can see this index is enjoying a very nice rally.  Out of the 4 major indices, the small caps are by far the strongest while the NASDAQ is clearly the weakest.

In a strong stock market environment, the NASDAQ should be the leader but we are not seeing that take place right now which makes me cautious on the stock market. Big stocks like GOOG, INTC and AAPL have already begun making lower lows and lower highs which may be a warning sign of things to come.


ben said...

Isn't it when the small cap outperform the S&P 500 and Dow
Jones transportation average leads the Dow Jones Industrial, the market is considered technically sound as there is broad base participation?

Kevin said...

I think the NASDAQ is a more reliable market leader to follow than the small caps.... but then again, this is just my opinion.

Chart Analysis said...

The Russell seems to have bounced off of the 50 MA, let's see if that holds.

Acepbaduy said...

I never play with nasdaq or s&p. Can they both be reference for currincies i played (ex=USD/JPY). Thank you

Btw, nice to stoping by here :D

Dhaka news said...

I will be looking to see NASDAQ for sure..

Lena said...

I think small caps and other micro cap in general have seen a good progress in the recent past. I think the post downturn environment has seen a lot of merger and acquisition activity which is probably one of the reasons that small caps are doing well.


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