Small Caps Are Outperforming | Stock Market Investing

Tuesday, May 27, 2008 | Home | Andy Mayo

Small cap stocks lead the stock market out of a recession.  It appears to be happening now.  The Russell 2000 turned bullish on point-and-figure charts today and as the chart below shows, it has begun to outperform relative to large caps.  In the top graph, the last time the small caps had better relative strength than the large was in 2006.  In the second graph you can see higher lows for the Russell 2000 (RUT) and lower lowers for the Russell 1000 (RUI).  This doesn't mean the Bear Market is over, but it is a positive sign.

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