Third-quarter earnings season will soon test the veracity of the long TNA trade. From Oct. 22 through Nov. 2, approximately 56% of the Russell 2000’s components report earnings.
Further supporting the small-cap outlook, the U.S. economy is still showing signs of growth with U.S. retail sales and consumer spending trends on the rise while the rest of the world is revealing weaker economic data.
There is a belief that when smaller stocks outperform large caps through the first three quarters of the year that money managers will sell small caps leading up to the fourth quarter, opting for “benchmark hugging” with larger stocks.
For more trends regarding Direxion ETFs, click here.
