Hey, Ross here:
Welcome to a new trading week.
After 511 days, it finally happened. The most-watched market index in the world – the S&P 500 – hit a new high.
Chart of the Day
After 511 days, the S&P 500 just broke out to a new all-time high.
This breakout also happened after almost exactly one month of market consolidation, where the market bounced between defined levels of support and resistance (the horizontal white lines on the chart).
On top of that, it also happened at the same time Treasury yields increased.
Now, it’s still a little too early to tell whether this breakout can be sustained.
If market breadth and participation can keep increasing, this could be the start of the next big move up.
Regardless, this is still good news.
But I believe the biggest opportunities are to be found in the most neglected market index – the small-cap Russell 2000.
Insight of the Day
Small-cap stocks are still lagging the major indexes – this is an opportunity.
The S&P 500, Dow Jones, and Nasdaq 100 are at new all-time highs. The Nasdaq composite is sitting at two-year highs – and is less than 5% away from its previous all-time high.
The small-cap Russell 2000 index? It’s still down over 20% from its previous all-time high.
But… we don’t need it to hit new highs for us to scoop up some healthy gains from small-cap stocks.
Because even though the small-cap index isn’t hitting new highs, they’re still rising in tandem with the rest of the market…
Meaning all we need to do is to target the market leaders in this sector – the ones that could break out far ahead of the rest.
Embrace the surge,
Editor, Stock Surge Daily