Even though the stock market has been rallying this month into next week’s highly anticipated Federal Reserve meeting with expectations for the first rate cut of a new easy money cycle the Russell 2000 small cap index has been lagging the S&P 500 unable to make even a new high for the year.
Take a look at the IWM ETF that tracks it.
If the stock market is going to stay strong it is probably going to require a breakout in the IWM ETF, because the market needs some new leadership. Stocks like AAPL, FB, GOOG, and NLFX are languishing now.
Even some big fad stocks of this year owned by many like ACB are lagging the market badly. That said I’m very excited to see the gold sector come alive. That has helped propel my July top stock pick up and is making me think we can get an even bigger winner for August.
Gold has been a big play, but many have missed out on the gold rally and are now wondering what to do. I talked with Jim Goddard of www.howestreet.com about that in an interview this week.
But now I’m watching the IWM ETF. I’m not planning on trading it, but am curious to see if it will breakout before this month is over. You can see the simple triangle pattern in the chart above that has now formed for it.