Keep an eye on small cap stocks, most notably the iShares Russell 2000 ETF (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.