I’m still musing about that session on Friday that was supposed to be a disaster.  It wasn’t.  But it was more defensive, and cyclicals also came to life.

Volume was light, but there were more new highs than lows on the NASDAQ – great sign.

Small Caps Roar

It’s been a good earnings season for small caps, which have begun to catch bids in part because they were so oversold. The S&P 600 Index is changing hands at a forward PE of 12.3%.  The chart is very compelling but runs into wall of resistance that takes it to the shadow of the 200-day moving average.

In June, less than 15% of the SML were trading above their 100-day moving average. Now, the number is above 43, but there is a lot more room on the upside.

Meanwhile, the ten- and two-year yield curve inverted to -0.497%, which screams recession.

Today’s Session

The market was building a lot of steam heading into the open when Nvidia (NVDA) issued a big earning warning.  That knocked some of the wind out of the move.