Mid-Caps Are So...Mid

via UrbanDictionary.com

mid

Used to insult or degrade an opposing opinion, labeling it as average or poor quality.

"We waited on that album for 6 months but it was mid!"

Mid-cap is the term given to companies with a market cap (capitalization)—or market value—between $2 billion and $10 billion. They are housed in the oft-overlooked MDY ETF, seen below on the daily chart. 

After a horrendous start to the month, the mids have spent the rest of March forming either a bear flag or base below their 200-day simple moving average (yellow line), depending on your interpretation. On longer-term timeframes, the MDY most resembles the Dow, what with its potential bearish inverted cup and handle top, as we previously noted here and with Members. 

Still, the value in analyzing the MDY is that it often strikes a delicate balance between the extreme strength in some larger cap names of late versus the lagging nature of many smaller names. 

Hence, headed into the second quarter next week we are dealing with a cliffhanger, as this MDY chart confirms. You may think that is obvious, but recall how many market players assume a new bull market is underway and that the October 2022 lows will not be touched. 

At best, the mid-caps are, well, mid right now. But I suspect into spring and Q2 something more bearish is lurking given the lack of alarm of this Index breaking and holding below its 200-day for almost all of March.