We know that the Russell 2000 small cap and high beta laden Index has been lagging the stodgier stocks for a while now. Generally speaking, that is a divergence that needs to resolve in favor of the bulls in order for the market to enjoy a sustained uptrend with diminishing price swings and volatility.
In addition, compare and contrast the highly defensive consumer staples ETF daily chart below (XLP – First chart) and the more economuically-sensitive consumser discretionary sector ETF (XLY – Second chart) on their respective daily timeframes. The former has been clearly trending higher while the latter is locked in a tough range. The large institutions have not fled equities as an entire asset class. However, they have been picky and that likely needs to change soon for bulls calling for a major run higher from here.
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That has to be one of the funniest pictures I have seen….ever