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Picture du Jour: Keep an eye on small caps By Prieur du Plessis, on March 20th, 2010 posted in: Investment, Stocks  2 people had their say - chime in!
As one would expect during a bull market, small caps have been a leading performer since the low of March 9 last year, with the Russell 2000 Index gaining 96.3% compared to a rise of 71.4% in the S&P 500 Index. Considering the last few days, however, small caps seem to have been tiring. As a result, the Russell 2000 Index has been the only major US stock market index to register a loss for the past week as shown below.
Source: StockCharts.com A few days’ underperformance is hardly grounds for drawing meaningful conclusions, but it is worth watching this space for a pointer regarding the overall market. I will leave you with a chart of the ProShares UltraShort Russell 2000 ETF (TWM), a fund that seeks daily investment results corresponding to twice (200%) the inverse (opposite) of the daily performance of the Russell 2000 Index. Being Saturday morning, I am posting the picture without further comment for you to ponder the most likely short-term direction of this bear ETF, and by implication the next move for small caps and stocks in general.
Source: StockCharts.com More on this topic (What's this?) Price Rarely Tells the Whole Story (TraderFeed, 2/23/10) Morning Briefing for March 2nd: Consolidating (TraderFeed, 3/2/10) Learn the Basics of Corrective Waves (EconMatters, 3/29/15) 2 comments to Picture du Jour: Keep an eye on small capsLeave a Reply |
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif)  (requires Windows Media Player) 
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My little TWM hedge from 3/10 is doing ok.
Rhetorically, how does one measure opportunity cost in a swing trade, as opposed to losing it to a tight stop, or closing it at day’s end? These inverse positions degrade for swing traders.
I don’t know. The small caps chart that I saw last week looked pretty good to me. It suggested that small caps have got a way to go before correcting.