..short small cap stocks in the US if you feel we are truly seeing a rates adjustment (even if this is not a global credit event?).  The Russell 2000 is the index of small cap stocks and one that has rallied 4.4% off the lows of early May to through yesterday while the SPX has only rallied 1.47% during that same period. 

PageLines- Buy-OTC-Stocks.jpgThe Russell outperformance has been rooted in two things: 1) a view that USD pressures might be more significant for large cap international companies  2) a relief from the rate rises that started the month but ultimately traded back to mid range levels through early this week.  Small cap stocks are much more exposed to rising interest rates because small businesses are more vulnerable to changing credit conditions. 

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