As I’ve been writing about over the last few weeks, stocks have been in their own little world. The persistent, incremental move to new highs in the S&P 500 and the Dow Jones Industrial Average hasn’t been supported by the economic data, profits data (which just rolled over in Q1 by the most since Lehman Bros. blew up), the bond market, the commodities market or the foreign exchange market.
But none of that mattered. Nor did the lack of participation by small-cap stocks, with the Russell 2000 not only well off its highs set earlier this year but struggling to stay above its 200-day moving average — a long-term measure of trend strength.
Unfortunately, the problem is only growing — festering like an infection — as key cyclical sectors continue to lag behind. Here are four to keep an eye on: