11/15:
The Nasdaq itself, however, rose back above the 50-day moving average. That’s where it should be if the composite has any aspiration to extend its uptrend. That’s no sure thing, but a victory for those watching technical signs.
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The Oct. 11 distribution day is now too dated, so it’s been deducted from the distribution-day count (now at 4). Still, the eight distribution days on the Nasdaq remain a drag…
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Eventually, it may not matter much if the tech giants end up foundering more. There’s a sector rotation unfolding, which is giving rise to a new market leadership. Construction, financial and some health care segments of the market are drawing the most interest. In the case of banks and medicals, investors expect government regulations to ease for those industries after Republicans secured the White House and control of Congress.
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As the market has picked itself up, no group of stocks has shined more than small caps. The Russell 2000, up 0.3% Tuesday, is at record highs and up an astonishing 9% since the election.
Where exactly are small caps getting their strength? Of more than 200 stocks in the Russell index up at least 20% since the election, about 80 are biotechs. That’s a huge chunk of the small-cap rally. About a dozen regional banks are in the same list, in addition to a number of savings and loans and other financials.