Large Caps Crushing Small — Russell Reverses and Drifts Lower

Days like today is what makes trading for a living hard. For the past 4 months, small caps have outperformed large. Tech has led all sectors, especially software. For whatever reason, junior at the trading turret decided to cash in his chips today. Markets are diverging.

Large caps are up by 0.2% and small caps are down by 0.55%. The Russell 2000 is lower by 0.75%, with noted weakness in recent IPOs and software stocks — the very things that have done so well in recent months.

So is this the end?

I don’t know. But trends ends with a whisper, rarely if ever announced.

I sold out of my old man stocks today, selling PG, GIS, and HSY, freeing up some cash. I am heavily long oil stocks now and only caught flat footed in a few tech stocks: ZUO, IQ, and EVBG. My quant fund is off by 0.4%, thanks to being heavily weighted in small caps.

It’s worth mentioning and noting.

Leading sectors to the upside and downside.

As for oil being the leading growth sector, I hope so. But I’ve been wrong on oil 20 out of the past 20 times. I was fortunate to have taken some profits on WTI this morning and perhaps overzealous for buying another 5 oil stocks in its stead. Some might say now is a good time to raise cash and get defensive. But I have ample cash and I do not have the inclination to be defensive. I am attacking at all times, with both verve and animalistic vigor.

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