• 13 hours Hedge Funds Having A Banner Year
  • 16 hours Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 19 hours BHP Turns Bullish On EVs
  • 21 hours Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 2 days The $90M Inflatable Rabbit Redefining Modern Art
  • 2 days Huawei’s Fate In The Air
  • 2 days Tesla Slashes Prices Again
  • 2 days The Modern History Of Financial Entropy
  • 3 days Italy’s Central Bank Embraces Sustainable Investing
  • 3 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 3 days Researchers Push To Limit Space Mining
  • 3 days Could China Start Dumping U.S. Treasury Bonds?
  • 4 days Is Winter Coming For HBO?
  • 4 days Rise Of EVs Signals Peak Gasoline
  • 5 days Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 5 days Gold Mining Stocks Stuck In Limbo
  • 6 days Executive Order Targets Huawei Over Espionage
  • 6 days Why Now May Be The Best Time Ever To Hold Gold
  • 7 days Fake News Sinks Shares In UK-Based Bank
  • 7 days De Beers To Build $468 Million Diamond Recovery Ship
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Small Caps A Showstopper For SP 500 Rally?

In today's post, we will answer one question and one question only:

Is it possible for the S&P 500 to perform well during a period of relative weakness in small caps?

As shown in the chart below, the answer is "yes, the general stock market can perform just fine when small caps are lagging". The top portion of the chart shows the performance of small caps relative to the S&P 500 Index. The bottom portion shows the S&P 500 moving from 464 to 1,358 during a period of relative weakness in small caps.

$RUT:$SPX Russell 2000 / S&P 500 INDX

The chart is not a commentary on 2015, nor is it a comparison of 1994-1999 and 2015. Remember, the purpose of the exercise was to answer one question. Any indicator or input that can give false signals for over five years and causes an investor to miss a giant move in the S&P 500, is not a particularly helpful indicator for monitoring the health of the S&P 500. The comments above are based on indisputable facts from market history.

 

Back to homepage

Leave a comment

Leave a comment