Small cap stocks breakout of a year long trading range adding more fuel to the risk asset bull market in the United States.
All year I was puzzled by the lagging small cap sector. But, finally this week the bulls bid up small cap stocks to new multi-year highs. I must admit that I didn’t expect this breakout to occur the week of NFP, but stranger things have happened.
Heading into year end looks like a good time for a rally, given the lagging performance of the small cap sector this year. Could be a nice trade to add some alpha to your portfolio.
Conclusion
To be sure, seeing small cap stocks breakout of a year long trading range was no surprise as the Nasdaq and S&P500 keep pegging new all time highs. It was just a matter of time. However, given the proximity to year end we could see a nice to close out the year. Fancy wrapping paper for the portfolio just in time for Christmas!
Be sure to checkout my latest post on inflation.
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