Mid Cap Stocks Pull Out in Front

After the SMH broke below its trading range yesterday we were a little worried about the message this was sending regarding the intermediate term outlook for the market in general. This is because the chip sector led the rally over the past six weeks. What we failed to notice was the fact that the mid caps have continued to rally and the S&P 400 mid cap index made an all time high at yesterday’s close. It was the small and mid cap stocks that led the market off the bottom in 2002 and the fact that they are running again can is a good sign. Scans today reflected this strength and we pulled up a number of mid cap stocks rallying on nice volume.