Small Caps Have Seasonality In Their Favor?
It's not even Halloween but on Wall Street small cap investors are jolly - 'tis the season, they say.
That is, the season for investing in the Russell - and the Nasdaq, too!
According to Jeff Hirsch of Stock Traders Almanac small caps and tech have seasonality in their favor and Tuesday’s sell-off presents buying opportunities.
”We had a very typical seasonal downturn from May to October,” he says. “And then we had a nice turnaround on Tuesday October 4th. It looks to me the seasonal patterns (are in tact) and the market is marking to those historical rhythms."
And those rhythems are music to the ears of every bull on Wall Street. Typically the fourth quarter is a strong quarter.
"I think we’re set up for a nice run into what are typically the best 3 months November through January."
Of course that begs the question – what’s the trade?
”I’m a buyer of the IWN , the ETF that tracks the Russell 2000 and the QQQ, the ETF that tracks the Nasdaq . That’s the easy way to go,” says Hirsch.
Got something to to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to email@example.com.
Trader disclosure: On October 25, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Nathan is long Oct. put spread AMZN; Nathan is long Jan. put spread BAC; Nathan is long Nov. put spread MS; Nathan is long Oct. put butterfly NFLX; Nathan is long Oct. put spread GS; Nathan is long Mar. call spread RIMM; Adami Owns AGU; Adami Owns C; Adami Owns GS; Adami Owns INTC; Adami Owns MSFT; Adami Owns NUE; Adami Owns BTU; Finerman owns AAPL; Finerman owns GOOG; Finerman owns JPM stock leaps; Finerman owns MSFT; Finerman’s firm owns AAPL; Finerman’s firm owns JPM stock leaps; Finerman’s firm owns MSFT; Finerman’s firm owns short calls IBM; Terranova owns IBM; Terranova owns AAPL; Terranova owns AXP; Terranova owns CAT; Terranova owns F; Terranova owns GS; Terranova owns OXY; Terranova owns FCX; Terranova owns LQD; Terranova owns MUB
For Brian Kelly
Shelter Harbor Capital is long GLD
Shelter Harbor Capital is long soybeans
Shelter Harbor Capital is long corn
Shelter Harbor Capital is long MON
Shelter Harbor Capital is long JJG
For Jim Iuorio
Iuorio is short Nov. calls VXX
Iuorio is long Dec. calls VXX
For Ron Insana
For Colin Gillis
This report is for informational purposes only and is based on publicly available data believed to be reliable, but no representation is made that such data are accurate or complete. Opinions and projections contained herein reflect our opinion as of the date of this report and are subject to change. Pursuant to BGC Financial LP’s policy, the author of this report does not own shares in any company he/she covers.
For Efraim Levy
Ratings from Standard & Poor’s Ratings Services are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. Standard & Poor’s assumes no obligation to update its opinions following publication in any form or format. Standard & Poor’s ratings should not be relied on and are not substitutes for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. Standard & Poor’s rating opinions do not address the suitability of any security. Standard & Poor’s does not act as a fiduciary. While Standard & Poor’s has obtained information from sources it believes to be reliable, Standard & Poor’s does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.
For Sony Kapoor
For Mike Vorhaus
CNBC.com with wires.