Karpel’s Corner: Watching Small Caps, treading lightly ahead of Fed

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

We are treading lightly going into the Fed tomorrow.

Watching the Small Caps ($IWM) today since we look at these high beta leaders I noticed that the Tech ($XLK) and Drugs/Healthcare ($XLV) were lagging the over moves of the other sectors. While this is nothing more than me looking, I just wanted to point it out since these two sectors make up about ~40 percent of the Small Cap Index ($IWM/$RUT).

One might ask, then, how did the Small Caps move to the upside if 40 percent of the index was lagging? One sector, Finance ($XLF) was red hot today. $XLF, which is about ~30 percent of the $IWM/$RUT, has been on a tear. Names like $SCHW/$AMTD/$EFTC have bounced convincingly to the upside for the first time in two months.

All eyes will be on the Fed. So, at this time, only high probability, small trades are on the agenda until tomorrow afternoon.

See you next time at Karpel’s Corner!