Value Small Caps Are Breaking to New Highs

One of the predefined RRGs allows you to bring up a universe of growth, value and size indexes, and this can help you to spot how the various parts of the market are positioned against each other and how they are rotating.

Ths small RRG shows the tail of the Small Cap Value Index and how it rotated into the leading quadrant back in November, lost some relative momentum over the last five to six weeks and is now starting to move higher on the RS-Ratio scale again. This makes Small Cap Value the strongest segment of the US stock market at the moment – and the price chart is confirming that now with a break to new highs this week.

That itself is a strong sign already, but a look at the relative strength line against the Dow Jones US index reveals that this Small Cap Value segment is just turning around from a very prolonged relative downtrend. This can very well be a long-term turn around in the making.

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