March 15th is the first major Bradley Turn Date of the year. And since the market has been shooting straight up, the only possible “turns” would be down or sideways.
And there are indeed flies in the ointment. The small caps have been lagging badly. The Russell 2000 is not validating the SPX and NDX breakouts. Not only has the R2K failed to take out its 2011 peak, but it hasn’t been able to break out of its recent trading range.
In a rip-roaring rally like this, you would think that the McClellan Oscillator would be crazy overbought. But it stands at -36.74! And that shows that there is no breadth to this breakout.
Where have the small-cap gamblers gone? I don’t know, but until they come back, this breakout should be viewed with skepticism.
Typically, what would happen in a bull market is that money would now rotate into the small caps. And you would have a day where the IWM is up 2% and SPY and QQQ are up only 0.5%.
The moral of the story is: all eyes on the small caps as they will likely call the tune from here one way or the other.
Note: The last major Bradley Turn Date was on December 28th. And that turned out quite well as the market turned from flat to up rather decisively.