Tag Archives: Russell 2000

The Small Cap Bubble

The Russell 2000 index reached new highs but price action is confined in a slowly rising channel in past six months. The trailing 12-month P/E ratio of the index is at 82. The top 20 holdings of the IWM ETF … Continue reading

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Russell 2000: New Uptrend Or Bull Trap?

The Russell 2000 index is up 18.6% year-to-date with the bulk of the profits realized in a rally that started a day before the elections. Any claims that the performance of the index is due to growth prospects under the … Continue reading

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Ten-Day Win Streak In Russell 2000 And Small Cap Risks

Last time there was a ten-day win streak in Russell 2000 it was followed by a gain of more than 28% after a short-term correction of about 6%. Annualized volatility of small caps is on a longer-term uptrend and mean-reversion … Continue reading

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IWM and IBB Top Holdings Point to Bubble Markets

Based on the top 20 holdings of IBB, seven stocks have negative EPS and eight stocks have P/E ratio greater than 30. In the case of IWM and based on the top 20 holdings, five stocks have negative EPS and … Continue reading

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Another Divergence in Small Caps Could Signal a Correction in Stocks

The Russell 2000 index is struggling to stay above major support at 1220. A start of another divergence between small and large caps would be a highly negative signal for the market. A move above 1250 in this small cap … Continue reading

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The Market Does Not Know

This is one of those periods when the market has no clue of what is coming next: an extension of the rally or a medium-term top? This is reflected clearly by the price action in small caps, as quantitative analysis … Continue reading

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