The market has been white hot to start 2020, which is causing investors to wonder when the extended rally will eventually run out of steam vis-à-vis the Dot.com bust in the late 1990s to early 2000s. Billionaire Mark Cuban, who made a fortune during that same timeframe, said the market environment was different.

“Interest rates were a lot different back then,” Cuban said on an episode of CNBC’s “Fast Money Halftime Report.” “And you saw a lot more people participating in the market. … You don’t see that now. That individual day trading really led the market to be frothy.”

Additionally, the Dot.com bust was also rife with day traders looking to make a quick buck with the rise of the internet and the ability to trade stocks online. Nowadays, however, its passive index funds that are doing the majority of the buying and selling.

“There’s so much money chasing index funds, so as long as those funds keep on growing the market is going to go up,” said Cuban.

So moving forward, Cuban feels interest rates will be the prime determinant of where the market will head.

“So that money is going to continue to flow into our equities, our market,” Cuban said. “I think interest rates will tell us what’s going to happen next in the market. Is it frothy? You can definitely make that argument. Is it like 1999? No.”

Trading Strength in U.S. Equities

The current environment creates an opportunity for investors to capitalize on the Direxion FTSE Russell US Over International ETF (NYSEArca: RWUI).

RWUI features:

Seeks investment results, before fees and expenses, that track the Russell 1000®/FTSE All-World ex-US 150/50 Net Spread Index (the “index”).

The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in securities that comprise the Long Component of the index or shares of ETFs on the Long Component of the index.

The index measures the performance of a portfolio that has 150% long exposure to the Russell 1000® Index (the “Long Component”) and 50% short exposure to the FTSE All-World ex-US Index (the “Short Component”).

Investors looking to play the other side can use the Direxion FTSE International Over US ETF (NYSEArca: RWIU)  to capitalize on international equities will outdoing U.S. equities. RWIU seeks investment results, before fees and expenses, that track the FTSE All-World ex US/Russell 1000 150/50 Net Spread Index, which measures the performance of a portfolio that has 150 percent long exposure to the FTSE All-World ex US Index and 50 percent short exposure to the Russell 1000® Index.

For more market trends, visit ETF Trends.

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