The market is always a very strange place. It has more twists and turns than any reality show, but what has been happening in the Russell 2000 for the last year defies explanation.
The Russell 2000 index has increased by more than 1.7 times since the market bottom in March of 2009.
That is not a misprint. The index is not up 17% it is up almost 170%!
This is an index, not a single stock, which means that every $1000 dollars that was invested in March of 2009 would be worth more than $2700 today. The same investment in US Treasuries would be worth $1007.
Here is the killer; the index funds have had a negative growth during this period!
You read that right!
Retail investors are taking their money out of the small cap index funds at record rates. In fact according to Morningstar assets, retail traders have taken back more than $15 billion since the end of April 2011.
If you follow me you know that I always say to react to the market and don’t try to predict what is going to happen. Since March of 2009 there have been some major selloffs and certainly it would have been right to take some profit off of the table, but to be a net seller of the index would have been predicting that it could not come back.
Trade the market you have, not the market that you want.
Using my technical analysis will allow you to participate in markets when they are bullish and get you to the sidelines when the bear comes to call.
All markets represent opportunity. Recognizing opportunity is my specialty.
To learn firsthand how I would trade the markets that are getting net withdrawals speak to one of my representatives and sign up to work one-on-one with me here:
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As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
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