As Recession Fears Ease, Small Caps May Be Ready To Surge

The market had itself a nice little day on Tuesday, easing some fears that the rally could be taking a turn more than just what would be considered a reasonable pullback. This bounce back was again led by the usual suspects, however, there was another area of the market that lent its hand in this price surge.

So much of this rally back into bull territory has been led by the tech sector on the back of the AI boom, but there has been one ETF that has been quietly performing in the shadow of big tech. Today, let’s take a look at the area of the market that is flying under the radar, waiting for the rest of the market to clue into the value it is providing.

iShares Russell 2000 ETF (IWM)

The Russell 2000 is an index comprised of 2000 stocks that are considered small-cap companies, or companies with total market value, or market capitalization, equal to about $250 million to $2 billion. With recession fears easing a bit, small-cap stocks have begun to look more attractive to investors, good news for IWM.

After finding support at 180, the ETF has climbed to 183.5 in just three trading sessions. Should the rally pick back up again, the strength should translate to even higher prices for the small-cap ETF. In addition, this ETF is a commonly traded one, so traders need not worry about liquidity issues or the spread being too large to trade it.

If you can wait for a slight pull back in this funds prices, back toward 182, accompanied by buyers stepping back in to the broader market, this could be an…

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