This market is all about large cap hedge fund hotels pressing new highs, ironically fueled higher by large hedge fund managers. The numbers do not lie.
Look at the Russell 2000 outflows, the largest since 2007.
Here are some interesting numbers that illuminate the lack of diversity in this record move higher.
Stocks with market caps under $5b are down 0.89% for the past week, -0.86% for the past month, -2.74% for the past 3 months, and +0.19% for the past 6 months. Hardly impressive, more like depressive.
Stocks with market caps over $5b are up 0.12% for the past week, +1.53% for the past month, +1.65% for the past 3 months, and +10.15% for the past 6 months. Wow.
The spread between large and small caps stocks is 1,000bps over the past 6 months. The fact that no one is talking about this is equally crazy. It seems that all of Wall Street are holed up in a few stocks, such as AMZN, AAPL, MSFT and NFLX, while everything else wallows in a holding pattern.
In my experience, this sort of dichotomy tends to lead to gigantic blow outs, once the market softens. Everyone is chasing alpha now and the place to be is in larger cap stocks, which investors view as ‘safe’ and liquid. However, the safety and liquidity of these stocks have been negated by overcrowding — so buyer beware.
The post Investors Yank Money Out of Small Caps at Fastest Pace Since 2007 appeared first on Trading with The Fly.
May 24, 2017 at 12:30AM
from Dr. Fly
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