Small-Cap ETF Leadership Gives Bulls Hope

July 9th at 1:24pm by John Spence

U.S. stocks have moved higher the past month and the outperformance of small-cap ETFs versus the S&P 500 shows investors are willing to take on more risk.

For the month ended July 6, the small-cap iShares Russell 2000 (NYSEArca: IWM) was up 5.9%, compared with a 3.2% gain for the S&P 500, according to Morningstar.

“The small caps have been outperforming since mid-June. Strength from this field is encouraging as they typically lead the market higher,” says Investors Intelligence technical analyst Tarquin Coe. [An Overview of Small-Cap ETFs]

“On the iShares Russell 2000 chart the 50-day exponential moving average is turning up following a test of the 200-day EMA, indicating the start of a new uptrend,” he wrote in a newsletter Monday.

iShares Russell 2000

The chart below shows the relative performance of the small-cap ETF against the S&P 500:

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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