The current state of small caps

The daily chart shows price at a pivotal point for small caps.  Currently just trading over a flattening 50 day moving average and up against the recent down trend line while filling the gap from Wednesdays selloff.  Volume has also been light into this week while everyone kind of waits for direction.  The RSI line shows a slight break of the down trend line ahead of price so we will keep an eye out to see if that could be a directional tell.

small caps again

The weekly chart shows where buyers stepped in this week.   Its basically right around $134 where it broke out around the end of 2016 and really has just consolidated for 5 months between 132 and 142.   Each higher high has been met with sellers so its just not ready for its next move but a nice trading range is established for now.

small caps2.png

Last week we broke down the top 24 % holdings for the IWM ETF and noticed that the average score of each was above 50% which we like to see if anymore upside is left.  The group as a whole is still maintaining.  Actually the top 10  holdings secured an average score of 63% so that’s still pretty healthy for now.  The chart of the 24 is shown just below

IWMbreakdown

Next I like to see where those 24 are today and maybe see if we can notice any strength occurring behind the scenes and maybe ahead of price.

Here is a list of the 24 sorted by weight in the IWM ETF

Name Ticker Weight Price
Advanced Micro Devices Inc AMD 0.44 10.88
The Chemours Co CC 0.43 41.61
Take-Two Interactive Software Inc TTWO 0.36 76.67
Coherent Inc COHR 0.32 242.25
LogMeIn Inc LOGM 0.31 111
Microsemi Corp MSCC 0.29 49.55
XPO Logistics Inc XPO 0.28 53.18
Olin Corp OLN 0.27 30.53
New Residential Investment Corp NRZ 0.26 16.45
Universal Display Corp OLED 0.26 113.6
PrivateBancorp Inc PVTB 0.25 59.89
Cavium Inc CAVM 0.25 73.4
Aspen Technology Inc AZPN 0.25 59.89
Webster Financial Corp WBS 0.25 49.76
Tesaro Inc TSRO 0.24 154.97
Teledyne Technologies Inc TDY 0.24 128.58
Exelixis Inc EXEL 0.23 20.25
Prosperity Bancshares Inc PB 0.23 64.85
F N B Corp FNB 0.23 13.65
MKS Instruments Inc MKSI 0.23 79.5
Idacorp Inc IDA 0.23 85.58
Bank of the Ozarks Inc OZRK 0.22 46.76
WGL Holdings Inc WGL 0.22 83.05
Parexel International Corp PRXL 0.22 79.69

small caps3

Today’ s run shows the following statistics

The 24 average has moved up to 57% (from 52)

The top 10 has moved up to 71% (from 63)

The IWM has been up 4 days in a row, today is still up in the air but could be 5 if any push after 3 pm.

Names like the below are really keeping small caps afloat

TOP10iwm

We will continue to monitor the underneath strength of small caps but as of today we don’t see much weakness overall as a group and support is/can still be bought.

Lastly we have a snapshot of the IWM as an ETF and a look at its technicals.  Its currently holding 58% so its just above average of the 24 weighted with all indicator averages currently on a buy signal

IWMASWHOLE

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