Breadth Participation by Market Cap

Large cap and blue chips were instrumental in getting the market to all-time highs back in September. As the rally has extended, large cap stocks have fallen out of favor in exchange for their high beta small cap counterparts. As you can see from the charts, small cap equities primarily responsible for the recent leg up.

The standout story is the Dow. It failed to make new breadth highs on the September run, and the 50-period moving average is only just barely turning higher. I tend to give disproportionate weight to this bellwether index. As the market is ripping higher, what is the Dow divergence trying to tell us?

Small Cap:



Mid cap:



Large cap:


Blue Chip:


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