Daily Gains Letter

iShares Russell 2000


Small-Cap Stocks Outshining NASDAQ, S&P 500; Top Investment in 2015?

By for Daily Gains Letter | Mar 9, 2015

Top InvestmentIf you haven’t already done so, you should start to take a closer look at small-cap stocks.

Small-Cap Stocks Outperforming in 2015

While small companies underperformed in 2014 with the Russell 2000 gaining a mere 3.53%, compared to the 13.40% and 11.41% advances by the NASDAQ and S&P 500, respectively, I believe that as the long as the economic renewal holds, small-cap stocks could turn things around this year.

So far in 2015, small-cap stocks are second only to the technology sector. The Russell 2000 is up 2.10% as of Thursday, versus a 4.88% move by the NASDAQ. At this time, small-cap stocks are beating the S&P 500 and DOW; it’s still early on, but it’s looking good coming off of a soft year in 2014.

The chart of the Russell 2000 shows a record-high and the presence of a bullish golden cross, with the 50-day moving average (MA) above the 200-day MA, based on my technical analysis.

Russell 2000 Small Cap Index Chart

Chart courtesy of www.StockCharts.com

Whether small-cap stocks can return the kind of performance we saw in 2013 is not certain, but I like the prospects for growth investors.

The reality is that small companies tend to fare better as an economy recovers due to the added flexibility to shift strategies on the run and adapt to changing situations. Imagine a large-cap like General Electric Company (NYSE/GE) trying to be nimble and change on a dime? It’s not so easily done.

Areas that I like amid the small-cap stocks are broad. I favor small companies that show strong growth metrics and have consistently managed to deliver strong results…. Read More

Top Small-Cap Stocks to Watch


January Volatile for Stocks, but Bull Market Not Over Yet

By for Daily Gains Letter | Feb 4, 2015

Bull Market to Continue This YearMany of you are probably happy to bid farewell to January. Not only was the weather nasty, but the stock market also traded in a volatile manner, with the bias to the downside.

The month ended in the red, with the major stock market indices trading below their respective 50-day moving averages and looking lower. The S&P 500 is below 2,000 once again and has been unable to get its footing above with any sustained momentum (as you can see in the chart below).

For traders who follow the historical cycles of the stock market, we know that the negative month suggests the stock market is in for some difficult times this year. But I’m not convinced the bull market is over quite yet.

Large Cap Chart

Chart courtesy of www.StockCharts.com

When the markets start January down, the tendency is for a down year for the stock market about 80% of the time, but that is not always the case. As we saw in 2014, January also produced a down month but recovered with an up year. That month, the decline in the Dow and S&P 500 was greater than this January’s, but the S&P 500 subsequently closed higher in eight of the next 11 months.

S&P 500 Large Cap Chart

Chart courtesy of www.StockCharts.com

Now, I’m not suggesting the same will materialize this year for the stock market, but it’s something to keep in mind as we move into February, which saw the markets bounce back in 2014.

The key for the main stock indices will be the 200-day moving average (MA), which is just below where the indices are sitting at now, with the exception of … Read More