Small Caps Underperformed In The Last 5 Trading Days (Ended April 5, 2012): Japan Falls 1.3 Percent In Early Trading;
U.S. markets could be under pressure after last week when the averages had the worst week in 2012. Our technical analysis research shows the U.S. markets could be under some selling pressure in the short-run if current trends continue, but this may be a buying opportunity for investors who have been on the sidelines.
Small Caps Fall Sharper Than The Broader Market
Small cap stocks took a hit this week. Yesterday, we outlined 4 Reasons U.S. Stocks Had The Worst Week In 2012 and today we have technical price movement analysis that shows small caps were out of favor last week and underperformed the broad market, the S&P500 and the NASDAQ. We wouldn’t be concerned if this happened when markets were biased upward so it’s possible the market could be moving sideways or below trend in the short run.
The Nikkei fell sharply today in early trading losing more than 1.4 percent after the open in the first trading day after poor U.S. jobs numbers showed and increase of only 120,000 jobs and inflation in China rose more than expected. The Nikkei .N225 was down 138.15 points at 9,550.30, barely holding above 9,511 which is its 50 percent retracement of its decline from February to November in 2011. The global story will be important again because U.S. economic data is languishing. We are looking at volatility and world global averages closely in Europe and Asia. Bond yields in Spain and other Eurocentric news be part of increased headline risk.