Intermarket Analysis – The Rally Still Has Power, But Is Fading Fast

By Chris Diodato

Good morning everyone!  I see that, with a good report on the state of unemployment in America, markets are in "rally mode" this morning.  That's great, but in recent days, I keep seeing a distinct pattern.  Small caps, which normally outperform large caps in bull markets, are now beginning to underperform their larger peers.  The small caps have been performing well in up swings, but for lack of better term, have been getting WHACKED in down swings.

Meanwhile, inflationary sectors, such as energy and materials, are leading the rally.

For the video analysis of what's going on in my head, click here.  Make sure to view the video in full screen and high definition!

Profile photo of MetroTraderDuring college Chris (D) earned the Chartered Market Technician (CMT) designation, and is currently the youngest CMT in the world today. The CMT certifies Chris' knowledge of market timing and risk management approaches. He tends to look for broad market moves and take advantage of them with index funds. The strategy he principally uses is mostly quantitative, and, tested, and has avoided or capitalized on every major recession since the 1940s.

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