Harry Rady presents his opinion below:

“We think that great companies, with strong patent portfolios and great IP will prosper no matter what happens. So we are not trying to predict the winners. We think the “commoditized” service providers, such as the HMOs, the generic drug makers; we think that under any scenario, they get squeezed. But companies that have these positions and these patents, they will do well.”

Follow the link to the Harry Rady’s complete video presentation.

Since there was not much trading volume, the loss is explained as due to a shortage of buyers rather than a large number of sellers, suggesting a hesitancy to get involved in the market until there is more clarity as to which way the market is actually heading.

It is clear that stocks have been rising too quickly considering the trouble our economy is still in, according to Harry Rady of Rady Asset Management.

“The market just seems to keep driving the car into the wall and then wonders why it can’t keep driving,” Rady said.

The Russell 2000, which is the index of small-capitalization stocks, posted a loss of 26.88 points, which is 5.61%, falling to a value of 240.85.

Improving consistently for the past 6 weeks, the Russell increased value by over 30% since its low at the beginning of March.

Credit markets have not been improving, even with the posted gains in small caps. Corporations just don’t seem to be signaling positive signs.

“Because these earnings haven’t been as bad as feared, it’s just provided an opportunity to put on more shorts. It’s just another head fake,” said Harry Rady of Rady Asset Management.

See the full article here:US Small Caps Close Lower On Slide For Regional Banks

Taking some of the wind out of the sails of a 6-week market upturn, a wave of sell-offs in small capitalization stocks seems to have returned investors to the skittish mood they have been experiencing of late.

Banks seemed to have set the tone last Monday for small caps. Despite the fact that larger banks such as Bank of America have posted better-than-expected gains in earnings, smaller, regional banks, which operate differently than the larger, national banks, did not do nearly as well.

Adding to the already nervous mood of investors, the smaller banks traditionally depend more on real estate and construction loans whose sectors are suffering disproportionately in the current economic climate.

Because “charge-offs” are much higher than what had been anticipated, there will be a erosion in book value and reported earnings for the regional banks as a whole.

For further analysis you can read more in: ‘US Small Caps Close Lower on Slide for Regional Banks.’