As where we are now, we have two good days for US Small Caps followed by two extremely bad days for US Small Caps. Many investors, like myself seem to have the idea that that a cut in interest rate will benefit smaller companies because of their greater tax burden. The smaller companies should rally based on that. Yesterdays’s economic data show certain signs that certain aspect of the economic is weaker and the potential of rate cut is more probable than less probable. The longer-term bond ETFs have done well: The TLT or the 20-year US Treasury ETF, which is very sensitive to potential interest rate changes, are up 2.7%. However, the small caps, which many have anticipate will rally, plunged instead. The Russell 2000 ETF is down 2.8% during the same period. So what could be the reasons for this price movement? A few days ago, I...