The best scoring small caps from one year ago have outperformed the R2K by 1,010 bps over the past year, with no turnover.  The top performers have been RAD up 303%, CAMP up 212%, JAZZ up 171%, MDSO up 148%, GBX up 111%, and UEIC up 108%.

• The best scoring small cap sector is industrial goods.
• The best scoring small cap industry is railroads.

The average small cap score is 57.7, slightly above the four week moving average score of 57.63.  The average small cap company is trading -19.7% below its 52 week high, 8.53% above its 200 dma, and has 6.85 days to cover held short.
 
Industrial goods and services score above average. Healthcare and financials score in line. Consumer, technology, utilities, and basics score below average.
 
 

The following chart breaks out average small cap score by sector since 2010.
 

The next table shows major market seasonality through May. Over the past decade, mid cap and the NASDAQ 100 have solid seasonal support, while seasonality for the R2K is neutral (up 6 of past 10, median return of 4.55%.
 

The following chart breaks out the seasonally strongest small cap companies.  All of these companies have seen shares finish May higher than they begin March in at least nine of the past 10 years.

The best scoring small cap industry this week is railroads (GBX). Business services (EXAM, CGX, KONG, ARC) also score high. Clarity into NIH and FDA funding and global spending growth in China supports scientific and technical instruments (FLDM, ALOG, PRCP, NEWP). Restaurants (RRGB, DAVE) also score highly.
 

None of the small cap basics industries score above average -- trade up in market cap. Buy processed & packaged goods (DMND) in consumer goods.  In financials, buy regional banks (TBBK, MBWM), savings & loans (FBC, WIBC, OCFC), and investment brokers (CLMS). C&I loan growth (as you know we've been reporting on the bullish trend since 2010) continues to support banks. Delinquency rates continue to improve. Watch for loan volume growth to support profit over the coming year.

 In healthcare, buy medical appliances (CYBX, BABY, CUTR) and drug related products (NUTR, AUXL). The best industrials baskets are general building (HW) and aerospace/defense (ORB). Across services, concentrate on rails, business services, restaurants, and staffing (CDI, KFRC). The top technology groups are scientific & technical instruments, semi ICs (TQNT, DIOD, PLXT), and business software (EBIX, NTCT, MSTR).