After weeks of the S&P 500 (SPY) trending higher, we are hitting the first rough patch in a while. It’s not showing up too much in the indices but we are seeing profit-taking in some of the big winners over the past couple of months. This includes oil which is now down to $77 from a high of $85. It also makes me feel good about taking profits a couple of times over the last few weeks in energy. In this week’s commentary, I want to talk about some new developments in energy, some economic positives and update our market outlook. Read on below to find out more….(Please enjoy this updated version of my weekly commentary published November 18, 2021 from the POWR Stocks Under $10 newsletter).
Over the last week, the S&P 500 is up by about 1%, however this is masking weakness under the surface as shown by the Russell 2000 which is down by 1.8%.
Of course, this is a change in behavior from the last couple of months which was marked by outperformance in small and mid-cap stocks which dominate the universe of stocks under $10. But it is similar behavior to what we have experienced for the bulk of 2021 – strength in large caps while small and mid caps are range-bound.