Strong small-cap outperformance continues Tuesday morning. The Russell 2000 ETF (IWM) is trading up over 1% while the Nasdaq 100 (QQQ) is in negative territory. All of the FATMAAN names are in the red but market breadth is robust with over 5,000 gainers to 2,000 decliners. That strong breadth is due to small-cap action.
This is the same sort of rotational action that we saw in early September. It is great for traders that focus on stock-picking but much tougher for market timers that are focused on trying to call turns.
Eventually, the rotational action out of the FATMAAN names spilled over and that caused a sharp drop in the broader market on Sept. 21-23. However, what has saved this market is that many areas are still quite healthy technically and fundamentally.
My core small-cap holdings continue to do well. Personalis (PSNL) , Nautilus (NLS) , and Big 5 Sporting Goods (BGFV) .
One of my other favorites is Xeris Pharmaceuticals (XERS) . It has been rising and forming a tight trading range, which should eventually serve as a good foundation for another move when there is a news catalyst. I continue to watch XERS closely and will add to it aggressively when the price action and volume improves.
There are some excellent pockets of action out there. This is bull market action and it is a relief to see that the FATMAAN names are not participating.
