The Small Cap Breakout

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.

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:

Turn Your Images On

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

~ Addison

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.

With the United States conducting what the Pentagon politely calls an “operation” against Iranian military infrastructure, markets have had every reason to be panicky. Instead, the past week delivered something subtler…

Gold has been consolidating after a powerful multiyear rally. Yet with America’s gold reserves equal to only about 3% of federal debt, the metal could still have significant upside ahead.

The Federal Reserve can print money, but it can’t print oil. As energy prices surge and supply disruptions loom, the central bank may find itself with limited tools to fight inflation driven by real-world shortages.

The plan to release 172 million barrels from the Strategic Petroleum Reserve would leave the U.S. with its smallest stockpile of emergency oil in more than four decades. And with tensions simmering globally, the shrinking reserve raises uncomfortable questions about how prepared the U.S. is for the next supply disruption…

Gold has been consolidating after a powerful multiyear rally. Yet with America’s gold reserves equal to only about 3% of federal debt, the metal could still have significant upside ahead.