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Ripple Effect

The Small Cap Breakout

Loading ...Addison Wiggin

September 19, 2025 • 1 minute, 12 second read


IWMSmall Caps

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.

Sign up now to become a member and join us for next week’s Live.

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.


Affordability, Meet Reflation

January 14, 2026 • Addison Wiggin

Today’s chart of inflation reflects an eerily similar path to the 1970s. The last CPI reading ticked back up 2.7%. If prices today continue to track those of the 1970s, the next wave of inflation could see prices rise higher and faster than during the 2021/2022 bout.

Yesterday, gold notched another new record high of $4647. Its slimmer, svelte cousin, silver, set a new historic high of $92. Both monetary metals are reflecting the market fear that once inflation gets started, it’s very difficult to contain.

Affordability, Meet Reflation
The Grand Realignment Gets Personal

January 13, 2026 • Addison Wiggin

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

The Grand Realignment Gets Personal
A Rising Sign of Consumer Stress

January 13, 2026 • Addison Wiggin

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

A Rising Sign of Consumer Stress
Protest Season Amid the Grand Realignment

January 12, 2026 • Addison Wiggin

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Protest Season Amid the Grand Realignment