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Back in December, I noticed that small companies started to gain ground on large companies (notice an uptick in the red line marked by orange circle). This red line represents relative strength of small companies vs. large companies. Small companies outperform when the red line is going up and vice versa. Back then, I mentioned that the US small cap index Russell 2000 (black line) is still trading in range and is having a hard time breaking through the resistance level (marked by pink horizontal line on the upper panel).

As it turns out, this caution was warranted. After a brief period of glory, small companies are falling behind again. The red relative strength line continues going down. I would stay the course with large companies for the time being but will continue to monitor relative strength