The small-cap Russell 2000 Index lost ground Monday and Tuesday, while the large-cap Dow Industrial Average and S&P 500 Index notched fresh highs. Two days don’t make a trend, but I’m keeping a close eye on this price action.
Continued weakness in the Russell 2000 could be signaling a flight-to-quality by traders unnerved by Cyprus’ financial crisis and North Korea’s saber-rattling. Or it might indicate this four-year old bull market is aging – historically small-caps lead the charge out of recession and as the economy improves, large-caps assume the leadership role.
For now, my Russell 2000 reading: Bull market.
Please note that my readings will change without notice, so please don’t buy or sell solely based on anything you read in this blog.