Chart of the Week: Seasonally weak period for Small Cap and Tech

March has historically kicked off a 6 week period when small cap and technology stocks tend to lag the broad market. Over the past 25 years, the median of the ratio of the Russell 2000 to the S&P 500 index has seen a decline from March 2nd through April 14th of around 2-1/2 percentage points. Over that same span, the median of the ratio of the Nasdaq to the benchmark measure has fallen by around 2 percentage points.
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Seasonally weak period for Small Cap and Tech

Nasdaqrussell

Source: Mike Panzner, Rabo Securities
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Explanations vary, but one that makes intuitive sense is that small investors, who have often favor such shares, need to raise cash to pay their taxes ahead of the April 15th filing date.

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Quote of the Day:
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“A statistician is someone who can draw a straight line from an unwarranted assumption to a foregone conclusion”  -Anonymous

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What's been said:

Discussions found on the web:
  1. jim commented on Feb 28

    Is this Google thing the straw that finally breaks the camel’s back? I guess time will tell.

  2. Bracken commented on Feb 28

    There appears to be a very strong weekly periodicity in the data, suggesting that you should generally buy or sell on certain days of the weeks. or am I just seeing things?

  3. Eclectic commented on Feb 28

    “Fate is an unkind taskmaster” – me

  4. Eclectic commented on Feb 28

    Arrybay,

    What do you suppose would be the philosphical opposite of ‘climbing a wall of worry?’

    ….maybe descending into a: ‘crevasse of complacency?’

    ‘gulf of gullibility?’

    ‘chasm of contentment?’

    ‘delusional ditch?’

    ‘precipice of prepossession?’

  5. pete Preissle commented on Feb 28

    John Williams’ estimate of real CPI at 8% seems reasonable to me.

  6. Eclectic commented on Feb 28

    I stand chastised in my ignorance, and I suppose the joke is on me.

    But, you see… ‘Slope of Hope’ has no meaning to a person who has never had the reason to conceptualize that he is on one. One never learns a language they don’t need.

Read this next.

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