The calamity in small caps continues to unfold.

But before I do a deep dive into this in relative terms, there’s something extremely important to be aware of: the absolute charts of the Russell 3000.

Looking at the chart, I find that things are making a lot of sense right now. The economy is not as strong as many of the talking heads are trying to preach to us.

If what they were saying about the economy were true, then the Russell 3000 wouldn’t be trading at the lower quadrant it has been for the better part of the past 12 months.

In fact, it looks to me that it might start breaking down soon.

The large caps on the other hand are up about 14% year to date, while the small caps are down about 1%.

This brings about the importance of asset allocation. Is it possible for large caps to catch down to small caps?

Here’s my answer…

In today’s 2-minute video, I explain if large caps could catch down to small caps – and why, the real reason why the S&P 500 is currently up and what to keep an eye on.

I release these weekly tips every Thursday for free, so stay tuned and stay subscribed here. 

Serge Berger

Editor of 11-Day Trader