Thrift Savings Plan

[baja6string]

Lack of leadership by the smalls should worry all investors. Even after the 25 Aug bottom, the small and mid-caps didn’t lead. This means that investors are now favoring the higher quality stocks. This is typical near a major top. As smaller companies begin to falter, investors sell them; next comes the mid-caps; and finally the biggest companies that support the large cap indexes fall. That will happen this time and it will mark the beginning of the bear market. We watched it happen in year 2000 and unless those smalls can retake the lead, it appears to be happening again. I hope the smalls do breakout, but I am doubtful that this cycle will be different.

I can't predict the top, but the stall in the S&P 500 is now 10-months long. That looks a lot like 2000 and 2007.