Chart o’ the Day: Small Caps Rip to a New Year High

My friend Jon Krinsky is out with another blazing set of charts this week for MKM Partners. He highlights several trends happening beneath the surface that aren’t exactly making the headlines – but should!

For one thing, he notes an impending breakout attempt for the bank stocks above their multi-year downtrend after a consolidation period that began in 2013. Insurers, Broker-Dealers and Diversified Financial Services industry components all like they’re ready to wile out.

Additionally, Jon takes a look at European Bank CDS falling (this is a positive, means less fear of the system), high beta/ cyclicals working versus low beta “bond proxies”, as well as the relative weakness in STUB sectors (Staples, Telecom, Utilities have all sold off since the July 4th break, while the market has broken out). If you’re a bull, this is what you want to see. If you believe in karma, you definitely want to see the Low Vol mythology lying in tatters too 😉

My fave chart in the pack is small caps versus large caps. Breadth has been the unsung hero of this summer’s market environment as the rally has broadened out across sectors and cap-sizes.

Here’s Jon:

Screen Shot 2016-08-07 at 6.43.45 PM

Josh here – Yes, that’s a new 52-week high for the Russell 2000 and an impending break of the downtrend in terms of small vs large. While many take their clues from a dizzying array of revision-prone economic data, I choose to focus on price to understand what’s happening. And in doing so, I find more reasons for optimism than pessimism.

A simultaneous rip higher in cyclicals, high betas, small caps and financials doesn’t suck.


Here Come the Financials
MKM Partners – August 7th 2016

Follow Jon Krinsky on Twitter!

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. WAGNER 0529002 manuals commented on Jan 19

    … [Trackback]

    […] Find More Information here to that Topic: […]

  2. pendaftaran bin lulusan sma commented on Jan 31

    … [Trackback]

    […] Here you can find 58380 additional Information on that Topic: […]