Editor's Note

Some sector rotation is normal but we currently have some serious bearish divergence. The small cap decline has been mostly ignored as a rotation out of a tariff safety play back into big caps. While that may have been true at the start, I find it hard to believe that is still the reason for the decline. Rates matter for small caps. They are most impacted by rising rates and the ten-year yield hit a 7-year high today. While I think the decline on the Russell is an overreaction we still have to be conscious of the move because the Russell typically leads the market up and down and we have some serious bearish divergence today. If this Russell decline continues, it could sour the entire market. I am really glad we did not enter new small cap plays on Wednesday.

 

New positions are only added on Wednesday and Saturday except in special circumstances.


NEW BULLISH Plays

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NEW BEARISH Plays

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