Public trading strategy
Mega-cap tech is getting routed but small caps are thriving — bet on the Russell
Thesis
While mega-cap tech stocks like Microsoft suffer historic routs due to heavy spending fears, small-cap stocks are booming and on pace for their best first half since 1991. This divergence is being fueled by political pressure on the Fed to cut interest rates, which historically acts as massive tailwind for small companies that carry more debt. As Wall Street looks for alternatives to volatile big tech, money is rapidly rotating into smaller, domestic companies.
Strategy approach
Build a momentum strategy on IWM using the D1 timeframe. Enter long when IWM closes at a 20-day high while MSFT closes at a 20-day low. Use a 15-day max hold and a 6% trailing stop.
Markets and timeframes
IWMD1