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Monday, August 6, 2012

Divergence


Interesting divergence between the S&P500 and Russell 2000 in the month of July.   The S&P is in a classic short-term uptrend, making higher highs and higher lows since bottoming in early June.  The Russell, however, after making a short-term high in July broke its uptrend line and has been making lower highs.
What does it mean?  Who knows for certain and could be just noise as the sell-off in the Russell is less than 4 percent.  It does show, however, big cap is in vogue and the economically sensitive small caps not faring as well this summer.   Keep it on your radar.
(click here if charts are not observable)

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