This still occurs in a context of continued heavy index investment.
Small caps continued to underperform, but their fate will depend on Trump's Tax reform. In the meantime, the earnings season is more a negative for small caps than for the NQ8 stocks.
Note below that the 250 smaller S&P500 stocks look less attractive here than the larger 250 group.
On the commodities front, XME seems to be experiencing a small bounce here, while oil continues to display a strong negative divergence.
The US$/Euro also shows that large investors are betting on a reversal here (a weaker US$/Euro.) This is strange as we consider the continued strength in the US/German rates differentials.
Conclusions:
The ECB is soon to decide on slowing the assets purchase program. This is maybe why traders are betting on a stronger Euro/US$. Or is it simply China selling US Treasuries for European based assets?
There is much negativity in the oil futures, which could take the whole energy complex down.
I increased my small caps puts yesterday, but still keep a neutral equities position.
Below are a few trade ideas either for long or short positions
