September 25, 2023

By Nigam Arora & Dr. Natasha Arora

To gain an edge, this is what you need to know today.

Recession Worries

Please click here for a chart of Russell 2000 ETF (IWM).

Note the following:

• The chart shows that small caps have accelerated to the downside and are now far away from the downward sloping trendline.  This is negative for the stock market.
• The chart shows that small caps have now broken below the support/resistance zone shown on the chart.  This is negative for the stock market.
• In contrast to the small caps, large caps are holding up.  Here are the reasons for this discrepancy:
  • Small caps are more impacted by a recession than large caps.