I don't have any statistics on it, but the divergence between the small-cap iShares Russell 2000 ETF (IWM) and the big-cap technology Nasdaq 100, in the form of the PowerShares QQQ ETF (QQQ) , has to be one for the record books. Over the last seven days the IWM is up 12.2% while the QQQ is up only 0.7%.
The odd thing is that both groups tend to be more speculative, with higher betas. When market players are looking to make up ground these are the groups that they gravitate toward. For a number of reasons the big-cap technology names have been declared losers under Trump. Alphabet (GOOGL) , Facebook (FB) , Netflix (NFLX) , Apple (AAPL) and Amazon (AMZN) are acting poorly.
At some point a long QQQ/ short IWM play is going to work when the gap between the two groups is filled, but timing is key. If you are inclined to try a paired trade of the sort, make sure you move incrementally.
For now I'm staying focused on individual stocks picking. There is some real craziness in names such as DryShips (DRYS) and sectors such as steel and even banks. JPMorgan Chase (JPM) and Wells Fargo (WFC) are now momentum stocks.
I've had some luck with good-looking charts I mentioned last week, such as Lantheus (LNTH) , Tower Semiconductor (TSEM) , Health Insurance Innovations (HIIQ) and Twilio (TWLO) , but I'm ready to take some profits if small-caps reverse more energetically.
There has been some very unusual action lately and the likelihood of reversals is high, but trying to apply logic isn't working very well.