Most people who watch the markets carefully have noticed that the recent weakness in stocks has been especially tough on the small-cap space. One good measurement of that trend is to look at the distance that stocks are currently trading from their 52-week highs. And by that measure, smaller stocks are getting hammered.
Within the large-cap S&P 500, the average stock is currently 13.2 percent below its 52-week high. Moving down the market cap spectrum, though, the numbers get progressively worse. In the S&P 400 midcap space, the average spread is 16.9 percent,
But members of the S&P 600 Small Cap index are down an average of 20.7 percent from their high over the past 52 weeks. Using the standard bear market definition of a 20 percent decline from a high, that means that the average small-cap stock is in a bear market.