The Small Cap Breakout

September 19, 2025 • 1 minute, 12 second read

The terrifying bull market broadened its base yesterday, driven by expectations of easy money.

Small caps tend to be more dependent on borrowing to finance operations than the cash-rich mega-cap players.

So it’s no surprise that as the Fed acquiesced to cutting interest rates Wednesday, small caps, as measured by the Russell 2000 Index (IWM) broke out of a four-year range:

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Small cap stocks broke through an existing trading range to new all time highs yesterday. (Source: TrendSpider)

Adam O’Dell suggested during yesterday’s Grey Swan Live! that the iShares Russell 2000 ETF, IWM, might be the index to watch – it could outperform the S&P 500 for the rest of the calendar year.

~ Addison

P.S. Our paid-up Grey Swan Investment Fraternity members got a masterclass in Adam’s data-driven approach to small-cap investing. That includes how he identified gold mining stocks before they outperformed the Mag 7 AI stocks over the past year.

If you are already a member, look for your monthly Bulletin later today.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three.

Look Past the Headlines: Green Zone Factors in Action

September 19, 2025 • Adam O'Dell

It’s important to remember that news flow is not the true driver of lasting, market-beating stock returns.

At the end of the day, fundamental and technical factors drive returns. They always have.

That’s why they’re the sole informant of my Green Zone Power Rating system…

Look Past the Headlines: Green Zone Factors in Action

Civics 101 for Investors

September 19, 2025 • Addison Wiggin

The Fed’s rate cut was a carrot. Trump’s challenge to Lisa Cook is a cudgel. Nvidia’s Intel bet is both. And Kimmel’s suspension? A warning that liberty itself can be chipped away by government jawboning.

For the investor who values freedom as much as returns, the lesson is simple: stability rests not on coercion but on trust that the do-gooders will leave the market alone. Break that trust, and the market’s incentives fail.

At the very least, Trump’s fast and furious attempts at realigning the U.S. on all fronts — political, judicial, financial — make for entertaining reading.

The better angels tell us to ignore politics altogether. Unfortunately, for our money’s sake, we do so at our peril.

DASH and LOW Stock Have One Key Thing In Common

September 18, 2025 • Adam O'Dell

Sometimes, a compelling market trend flashes like a neon sign on the Vegas strip.

We’ve seen that a lot with mega trends like artificial intelligence (AI) over the last few years. Just last week, Oracle was rewarded with a 40% post-earnings pop in its stock price after a strong earnings outlook for its AI cloud business.

Other times, you’ve got to do a little work to find out what’s driving a stock’s price higher. And my “New Bulls” list each week is a great place to start.

DASH and LOW Stock Have One Key Thing In Common

The Carrot and The Stick

September 18, 2025 • Addison Wiggin

Incentives grow markets. Regulation stunts their fragile bones.

The Fed’s rate cuts are carrots. Markets are feasting on them. Over in the Grey Swan Trading Fraternity, Portfolio Director Andrew Packer added a long trade in the commodity market – in a small-cap player, producing a commodity domestically.

As a cherry on top, it might be the next MP Materials or Intel and get explicit government backing, which could really cause shares to take off.

Trump’s threats to the Fed, or the FCC’s jawboning of broadcasters, are sticks. Investors must decide which matters more.

As one market veteran told The Wall Street Journal: “Cheaper money is a carrot. But the bigger question is whether trust in our institutions can hold. Without that, the carrots won’t matter.”