Despite some noticeably weak action in the transportation sector, in addition to Intel and the semiconductors being unable to muster much of a bounce, the fact of the matter is that the outperforming small caps in the Russell 2000 Index are enabling more than a few stocks to break higher today. At some point, all of these divergences are likely to resolve one way or the other. Trying to game precisely when that will happen and which side will win out, though, serves as little more than a distraction for the task at hand. That task, of course, is simply trading the market before our eyes, with plenty of green on my watchlist and in my portfolio for members of 12631 to see at all times. In addition to the small caps, the retail and consumer discretionary space is acting well this morning.
With this type of promising but flawed market, I am playing along with the stocks that are working well, keeping losses small, and staying open-minded for any divergences that begin to resolve one way or the other. Common sense dictates that the consumer discretionary and small cap strength means risk appetite is alive and well. And, for now, the little guys in the Russell are calling the shots.