Sunday Morning Coffee

As the quarter is ending the market is sending mixed signals on a couple of fronts. The two best performing sectors were staples and healthcare which are both traditionally late cycle outperformers (and they do also typically hold up better on the way down). On the flip side, small cap outperformed large cap and large cap out performed mega cap–as measured by iShares Russell 2000 ETF (IWM), the SPDR S&P 500 Trust (SPY) and Guggenheim Russell Top 50 ETF (XLG).

If it was late in the cycle then it should be the other way around, mega cap should lead the market. This is not normal market behavior although I can’t imagine it is unprecedented either. It could be a distortion caused by the ongoing Fed action or not but I do think it is worth pointing out as a sign of confusion within the market internals.

Of course this could turn out to be nothing but the history of both indicators makes this worth paying attention to, in my opinion.

I haven’t said anything about the NCAA tournament this year but it has been a great so far. All season long the “experts” talked about parody in the college game and obviously they were right given how poorly the one seeds have done and that Wichita State, a nine seed, made it to the final four–they’re no George Mason but still.

Ditto with NCAA hockey; it seems like Boston College and North Dakota make the Frozen Four every year, or at least one of them but not this year. Wow.

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