Small Caps

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A lot of speculation regarding small caps being a 'catchup trade'.

Perhaps it will play out that way.
Perhaps it wont.

A few observations:

Weekly chart has held long term trend, well, over the past 20 years.

Small caps are sensitive to Fed Funds Rates.

The circumstances of the rate change is important.

My expectation:

Small caps upward move will precede the FFR cut.

Small Caps should fade from long term trend, given 'higher for longer'.

Stock pickers would be better suited to hand select small caps with strong balance sheets, as opposed to a shelf item small cap ETF.



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