SMALL CAPS SIGNAL RECESSION WORRIES, LARGE CAPS HOLD UP ON AI FRENZY
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.
September 25, 2023