The best scoring small caps from one year ago have outperformed the R2K by 748 bps over the past year, with no turnover.  The top performers are RAD up 230%, JAZZ up 172%, PRCP up 99%, TYL up 92%, and GBX, up 81%.


 

• The top scoring small cap sector is industrial goods
• The best scoring small cap industry is railroads

The average small cap score is 51.4 this week, below the four week moving average score of 57.74.  The average small cap is trading -22.49% below its 52 week high, 1.60% above its 200 dma, and has 6.5 days to cover short.
 
Industrials, financials, utilities, and healthcare score above average.  Services and technology score in line.  Consumer and basics score below average.
 

The Russell 2000 (IWM) has finished April higher than it starts February in 8 of the past 10 years, producing an average and median 4.6% and 4.3% return, respectively.  The IWM's standard deviation for the period is 7.54% and its correlation to the SPY is 0.91.
 

The following small cap companies offer robust seasonality for the three month period ending April.


 

The top scoring small cap industry is railroads (GBX, ARII).  Rails continue to benefit from robust petroleum carloads, supporting tanker car demand.  A recovery against weak comparisons for coal and grain deliveries offers opportunity.  Scientific & technical instrument (AFFX, PRCP, NEWP) demand benefits from an expected 3.2% lift in global R&D spend this year.  Business software (NTCT, PRFT, CSGS) offers opportunity as IT budgets are deployed.  Aerospace/defense (ORB) companies benefit from rising production rates at OEMs and improving clarity into DoD budgets.
 

The number of stocks more than 5% below their 200 dma went from 166 to 392 in the past 6 weeks.
 

The percentage of small caps more than 5% below their 200 dma has climbed from 18% on January 2nd to 35% this week, the highest level since November 15, 2012. The SPY cut below the 200 dma that month and made its low on November 16th.  
 

No small cap basics industries score above average -- trade up in market cap where possible.  In consumer, buy processed & packaged goods (DMND), and textiles (DXYN).  The top financials baskets are investment brokers (CLMS), P&C insurers (GLRE), and regional banks (TBBK, MBWM).  In healthcare, only biotech (ANAC, KERX, PDLI, INSY, DYAX) and medical appliances (SMA, OFIX) score above average.  Aerospace/defense and general building materials (HW) are best in industrial goods.  Rails, marketing services (ABTL), business services (CGX, ARC) and staffing (CDI) are strongest in services.  In technology, focus on scientific & technical instruments, business software, and diversified electronics (IVAC, MEI).  Computer peripherals (PLNR) also score highly.