The average small cap score is 46.17 and that’s below the four week score of 49.92. We’re getting close to an actionable low in average score (see later in today’s report). The average small cap stock is trading -38.61% below its 52 week high, -14.63% below its 200 dma, and has 8.52 days to cover held short. Typically, actionable bottoms occur when small cap short interest exceeds 9 days on average (above 10 is best).

Utilities (small sample size), consumer goods, and technology are the top scoring baskets. Technology is typically a strong performer in Q1. For example, the XLK has only lost ground in one of the past 10 Q1s (2008). Usually, tailwinds for tech are stronger in February and March than they are in January (see yesterday’s report).

Financials score in line with the average universe score. Services, healthcare, industrial goods, and basics (still) score below average.

The following chart shows historical small cap average score back to 2008. Actionable buy points historically happen when scores get below 50, but scores have gotten into the low to mid 40s since the recession, so wait for a clearer signal.

The best small cap baskets are resorts and casinos (CNTY, BYD, MCRI), processed & packaged goods (DMND, BDBD), and integrated circuits (OVTI). Business software (TSYS, EBIX, PRFT) and gold (DRD, SA, HMY) are also strong.

Gold is the only basket in basics to score above average. Over the past 10 years, January has been the best month of the year for GLD returns. February and April are usually solid performers, too.

Processed & packaged goods and home furnishings (SCSS) can be bought in consumer goods. In financials, focus on S&Ls (PROV, NWBI) and regional banks (CFNL). Specialized health services (PRSC, HWAY) and medical instruments (UTMD, OSUR, IART, LMAT) are strongest across healthcare. Only industrial electrical (ULBI, BGC) can be bought in industrials. Resorts & casinos, restaurants (SONC, BJRI), and catalogs (FLWS) are top scoring in services. Semi ICs, business software, and semi equipment & materials (UTEK, OSIS) are the highest scoring technology groups.