small caps vs large caps 10.16.14

Over the recent past we’ve seen significant outperformance in the small cap stocks versus the large caps.  The above chart shows that the Russell 2000 Growth Index (IWO, which is the proxy for small caps) is up 2% versus an almost 3% drop in the SPY (or large cap S&P 500 index) over the past three days.

This might suggest that even the riskier parts of the market (small caps being riskier than large caps on a relative basis) have been beaten down so much and are looking to bottom.

A glimmer of hope and a development to continue to watch closely.