The major US indices saw their first declines of the month on Friday after a stronger than expected Nonfarm Payrolls report put a damper on hopes for rate cuts. Despite Friday’s declines, conditions are still firmly overbought across the board with twelve major index ETFs overbought—many approaching extreme levels—and two at neutral levels. While large caps have primarily been leading the way higher with gains of 2%+ over the last week, the Russell MidCap (IWR) has actually performed the best in the past week with a gain of 2.53%. Other mid-caps like the S&P MidCap 400 (MDY) and Core S&P Mid-Cap (IJH) have also been making solid moves higher, both rising 2.28% last week, but IWR has recently more resembled the large-cap indices that its mid-cap peers. Meanwhile, small caps have lagged a bit. Both the Micro-Cap (IWC) and Core S&P Small Cap (IJR) both remain at neutral levels and in sideways trends over the past six months as they still have yet to reach new highs.
As previously mentioned, small caps have struggled to make a solid push back to last year’s highs. Over the past six months, small caps have basically been flat with current levels at the upper end of this range and near a longer-term downtrend line. It is a similar picture for mid caps although they are currently much closer to prior highs. The moving averages for these indices are basically all flat if not sloped downwards. The only outlier is the Russell Mid-Cap (IWR) which was reaching new highs as recently as last week with a chart that looks more similar to large caps like the S&P 500 (SPY) than IJH or MDY. Start a two-week free trial to Bespoke Institutional to access our interactive Trend Analyzer, Chart Scanner, and much more.