A group of stocks that led the past two market rebounds is lagging this time around. And that may be a bearish signal.
Ned Davis Research warned of the trend out in a note to clients this week. The firm has small-caps"on watch" for a downgrade from neutral to bearish. Ed Clissold, chief U.S. strategist at Ned David Research, is still looking for confirmation that small-caps are warning of a broad market peak. One reason small caps usually lead rallies is that they tend to be less liquid. So when the stock market rises, they may get bid up more quickly, according to Dan Miller, director of equities at GW&K Investment Management.
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