The 30-minute timeframes of both the IWM (small caps in the Russell) versus the SPY below illustrate the outperformance is the small caps not just since yesterday’s intraday bottom, but we also know they have led off the 11/16 correction lows.
I see the financial media and many traders continue to harp on the market and uncertainty stemming from the Fiscal Cliff nonsense. Interestingly, the high beta small caps have yet to really acquiesce to that thesis after a routine pullback over the past week or two.
Every pullback, though, comes to a point where the rubber meets the road. The IWM now holding above $83 (and especially $82.50) seems to be the key piece of the puzzle.
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