Prior to Labor Day we noted the tendency of small-cap stocks to outperform large-cap stocks beginning at the end of August and lasting until around mid-September. This small-cap advantage typically begins on or around the 18th trading day in August and lasts until around the 12th trading day in September. On average the Russell 2000 has outperformed the Russell 1000 by 0.7% during this time span with the Russell 2000 outperforming 70% of the time over the last 40 years. As of today’s close Russell 2000 is up 4.5% since the close of August 26 while Russell 1000 is up 3.3%. As a reminder, small-cap outperformance in September usually does not last much beyond the 12th trading day (September 18th, this year).
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.