AFTERNOON UPDATE

The markets continue to meander this afternoon with the SMH leading the way a bit higher. Market internals are mildly bearish as 800 more shares trade lower than higher.

The Oils and Metals continue to take the brunt of the selling and tech and small caps look like the best bet for an upside shot.

The IWM trades near all time highs and the chart tells me nothing is about to change any time soon. Robert Marcin, on realmoney.com sees things a bit differently:


"A falling US dollar and a rising domestic interest rates play into the hands of large cap, multinational companies. I wonder if the small cap trade is not over, if only on a short term, relative basis. I know everyone says small caps are overpriced, but they keep working. Investors said that about the long bond not too long ago as well. Once investors wake up, things can change quickly."

Folks have been crowing about the end of the small cap trade for years as they have outperformed the bigger guys by a wide margin. I would like to know why folks insist on calling for an end to a strong trend. When has that been a good trading strategy? BTW, Bob has been calling for lower oil prices since crude was in the $40/$45 area and has called for higher homie stock prices since they were about 1.5 times the current prices. Just so you know.