In July alone, the iShares Russell 2000 ETF jumped upwards of 12%, outpacing the S&P 500, before retracing half that distance. Historically, the Russell (in general) hasn’t done as well as other major indexes, mainly because it doesn’t have the same exposure to fast-growing tech companies. However, that lack of exposure is driving its surge, as investors may be rotating out of tech and into small caps. What this might indicate: The small cap surge signals a shift in market sentiment, with investors eyeing opportunities beyond the tech sector. The Macro View Let’s take a look at the chart below: iShares Russell 2000 ETF (IWM). CHART 1. WEEKLY CHART OF IWM. The Russell 2000 proxy is recovering from a decline and a lengthy trading range. IWM was in a bear market from the end of 2021 to the middle of 2022 (see blue dotted line), losing 31% of its value…
