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This does not only apply to stocks, it applies to just about all risky assets.

While Momentum continued to struggle and Value surged, the Size factor played a much larger role as Small Caps were hit hard in April.

Initial Q1 Earnings Well Below Average.

Small Caps are selling at a 19% valuation premium relative to Large Caps (23% last month).

In April, Large Cap Value widened its YTD outperformance over Large Growth to 730 bps.

Market Cap has been slightly better than equal the past two months.

The Major Trend Index fell 0.04 to 1.15 in the week ended April 25th, driven largely by a moderate loss in the Momentum/Breadth/Divergence category.

With the exception of domestic equity ETFs, all broad fund categories experienced net cash inflows this week

The Major Trend Index extended its bullish streak in the week ended April 18^th, rising 0.02 to a level of 1.19.

Both bond mutual funds and domestic equity mutual funds experienced net cash outflows this week. Domestic ETFs also had a rough week in terms of net cash flows, especially the large cap genre.

The Major Trend Index rose 0.02 to 1.17 in the week ended April 11th, resulting mostly from another weekly gain in the Attitudinal category.

Estimated domestic equity mutual fund net cash flow remained positive this week at $2.4 billion.

Many fund categories are exhibiting similar but muted net cash flow trends to those recorded at this time last year. However, equity ETF net cash flows, both U.S.- and foreign-focused, remain flat in contrast to last year’s strong start. Nonetheless, the definitive shift in trend from bond to equity funds which began midway through 2013 is still intact.

The S&P 500 gained 0.7% (price only) in March. Based on the 1957-to-date valuation metrics presented below, the S&P 500 has 12% downside to its historical average. The S&P Industrials (which excludes Utilities and Financials) now has 25% downside to reach mean valuation.

In Q1 the High P/E Tier was the worst performing subset, down 2.2%. It was the best performer in 2013 (+39.9%), with the Middle P/E Tier (+33.0%) and Low Tier (+33.9%) trailing. 

Well-rounded factor strength, coupled with an intriguing fundamental backdrop, lead us to our first Materials group holding in a year.

A quick look at the Managed Health Care, Semiconductors, Technology Hardware Storage & Peripherals, and Cable & Satellite groups, all of which caught our eyes this month.

The Major Trend Index closed the week of April 4th at 1.15, down from a five-month high of 1.21 recorded at the end of February.

We examine the impact of March’s strong group leadership reversal on the top and bottom of our group model.

Both of our short strategies have failed to keep pace with the inverse of their respective benchmarks so far this year.