The Dow Jones Industrial Average gets the headlines, but in this market the small stocks, such as those in the Rusell 2000 ETF (NYSE: IWM) are getting all the glory.



Chart Courtesy of StockCharts.com



In a recent article in this space we noted that we seemed to be in a stealth bull market for small and midcap stocks. That was a few days ago, in the pre-employment report days of March.

As of March 5, the small stocks had moved slightly higher, and didn't seem to be giving any quarter to the large cap stocks which, although, also climbing, were still shy of making a new high from the March 2009 bottom in the stock market.

What we're seeing is a significant change in money flows, as money managers are putting more money into small stocks. There are two major reasons for this.

One is that small stocks have more growth potential than large stocks. And second, the dollar has strengthened, making it harder for large multinational companies to grow their earnings.

What makes this trend more important is that changes in trend in the dollar tend to remain in place for a long time. More interesting is that long term bull runs in small stocks can also last long periods of time.

What we're saying is that we may be in one of those periods where the current trend could be in place longer than many investors suspect.

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