![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjS7bWbs_n8P4lLtHOAGfIpQzn909MZO7V_jrMmw3LY9kyF8V_DwbWigF-DkJtDdO3QfBnH3q3xXee5Ar5qP89RjJD_pVvLaRMMYT69Y1eE9tIeO9UN2A_Er0Vl8cB2vNowkEqv/s400/Cap042709.gif)
Since the market bottom in March, note how performance has been strongest among small caps ($SML), next strongest among midcaps ($MID), and weakest among large caps ($SPX). This is another case in which the relative movement of more and less speculative issues provides a sentiment gauge.
In a bull market mode, risk appetites and speculative interest lead traders and investors to smaller, more entrepreneurial issues with higher growth potential. In a bear market mode, risk aversion and the need for safety lead traders and investors to larger, more established blue chip names with higher perceived stability.
While the indexes are in a multiday range at present, with small caps underperforming large caps since 4/17, the overall bullish sentiment dynamic remains intact, reflecting strength in the NYSE TICK. Per my recent post, I would expect to see weakness in the Cumulative TICK and relative underperformance among small and midcap issues if we are to sustain a downtrend.
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