October 8, 2018

The Russell Is At Bargain Basement Pricing

The small-cap space has been considered one of the “safe haven” trades this year, especially to combat the tariff concerns.  The Russell 2000 Index had been up over 13% heading into September as compared to 8.5% for the large-cap S & P 500. But recently the small-cap space has lagged and in fact, with the recent sell-off, dropped right down to its 200-day moving average.

The iShares Russell 2000 ETF, or IWM is a fantastic product to trade the small-cap space.  It has huge open interest, tight markets and is extremely liquid. Take a look at this chart:

Each time that IWM declined down to the blue line (the 200-day moving average), the ETF rebounded.  Will history repeat itself?

Watch here to see our evaluation and the discussion we had today in our Live Signal Trading Room:

about the author:

Scott Bauer

A respected market commentator seen on Bloomberg, Fox Business, CNBC and other major financial networks, Scott Bauer has 25 plus years of professional equity and index options experience at the Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange (CME) and as a Vice-President/trader for Goldman Sachs. Scott graduated with Honors from the University of Illinois Business School and has taught classes both at his alma mater and at the CBOE.

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