For the last 5-6 weeks the market has been favoring the large caps. Since start of this bull market bulk of the out performers were mid caps and small caps . So does it herald a long term trend or is just a correction in these sectors.
So currently the hypothesis that relative valuations between capitalization sectors would tend to support eventual large cap outperforming is proving to be working. Which also means we are in late stage of bull market where large cap out perform according to many researchers.
A study of bull markets going back to 1900 by Ned Davis
Research, an investment research and advisory firm in Venice, Fla., seems to bear this out. An index constructed for the study showed that in the first third of bull markets, stocks that pay dividends tend to trail those that don't pay them. In the middle third, the dividend payers lead slightly, but in the final third, dividend payers, on average, win handily.
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