Quite often there is some excellent speculative trading in small-cap stocks in front of a holiday. That is not the case today. In fact, the indices are doing a very nice job of covering up some extensive weakness in small-caps. Breadth is running 2-3 negative, and the list of stocks up more than 10% is a puny 18 names long.
The Russell 2000 ETF (IWM) is down more than 1%, while Nasdaq 100 (QQQ) is up more than 0.6%. The main action is rotation into the FATMAAN names and a few other big-caps like Oracle (ORCL) , Nike (NKE) , and Chipotle (CMG) and out of more speculative smaller stocks.
There tends to be an inclination to read more into this action than there really is, but after what happened back in February, it is understandable the small-cap stock pickers grow quite nervous when there is this sort of divergence between the indices and the names favored by individual trades.
If there is a continuation of this action next week, I'll be concerned, but there has been quite a bit of choppy rotation recently, and with earnings season fast approaching, there should be a shift back into stock picking as some good reports are anticipated.
So far, it is very dreary 'holiday' trading, and I expect that will drive my market participants to head out early.