Broad Based Rally, Small Cap Stocks Lead

Broad Based Rally, Small Cap Stocks Lead

Broad Based Rally, Small Cap Stocks Lead

$DIA, $SPY, $RUTX, $QQQ, $VXX

  • Wall Street’s small caps are beating the The Street
  • The small-cap Russell 2000 finished + 1.0%, closing at a new all-time high

Wednesday’s broad based rally saw shares of smaller, domestically focused companies showing strength.

The small-cap Russell 2000 finished + 1.0%, finishing at a new all-time high, the tech-heavy NAS Comp added 0.6% and the S&P 500 and the DJIA advanced 0.4% and 0.3%, respectively.

The Russell 2000 (RUTX) tracks US small capitalization companies, as does the S&P 600 (SPN) which closed at a record high Wednesday, underscoring the ascent of a section of the stock market often overlooked by the financial media but not by savvy investors.

When the economy is stronger than normal, small caps do better. With a good economy like are seeing under The Trump Effect, we fully expect this to keep playing out into 2-H of this year, and beyond.

Widely used by small-cap oriented investment funds to benchmark their performance, the Russell 2000 has gained over 4% in 2018, compared to the S&P 500’s 2% rise.

That is a reversal from last year, when the Russell 2000 rose 13%, underperforming compared to the S&P 500’s 19% rally.

Materials was the top-performing sector on the day with a gainer of 1.2%, but consumer discretionary and consumer staples also outperformed, adding 0.8% apiece.

Wednesday, the major US stock indexes finished at: DJIA +62.52 at 24768.93, Nasdaq +46.67 at 7398.30, S&P +11.01 at 2722.46

Volume: Trade on the NYSE came in at 755-M/shares exchanged

  • NAS Comp +7.2% YTD
  • Russell 2000 +5.3% YTD
  • S&P 500 +1.8% YTD
  • DJIA +0.2% YTD

HefX-LTN’s Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
16 May 2018 QQQ 168.93 Neutral (0.18) 168.50 169.43
16 May 2018 DIA 247.68 Neutral (0.19) 245.26 248.38
16 May 2018 SPY 272.24 Neutral (0.17) 271.07 274.41

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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