Keep an eye on small cap stocks, most notably the iShares Russell 2000 ETF (SYM: IWM).
For one, according to analysts at Jefferies, small cap stocks are starting to outperform. “As the year rolls along, small-cap earnings are set to broaden, accelerate, and play a game of catch-up with large,” said the firm, as quoted by CNBC.
Two, billionaire Stanley Druckenmiller revealed a substantial bullish position in small cap stocks recently. According to CNBC, he bought $664 million worth of call options on the iShares Russell 2000 ETF (IWM). Three, after a recent pullback, the ETF is just starting to pivot higher again. From its last traded price of $204.04, we’d like to see it initially retest $210.
