Wednesday, January 21, 2009

Small caps showing better

Small cap stocks will likely be the most promising segment of the market over the next quarter. Big cap stocks withstood the bear slide of last year better than the vast majority of stocks. Stock Trends Relative Strength Indicator for the Dow Jones Industrial Index, for example, ran positive through Q3 and Q4 of 2008. The RSI of the Russell 2000 Index, though, underperformed the S&P 500 Index for most of that same period. Now things are changing. Blue Chips are starting to lose ground to the recent performance of small cap stocks. The Russell 2000 RSI is trending up. The Dow Jones Industrial Index RSI is trending down.



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