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Apple, Nasdaq, and Russell 2000 Look Ready to Bounce

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Here are some affordable ways to play a bounce/rally in the coming weeks.

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Russell 2000 Index (INDEXRUSSELL:RUT)

I really like the Russell 2000 Index because small-cap stocks can rally hard and fast, outperforming the large caps like AAPL, S&P 500 (INDEXSP:.INX), Nasdaq, and Dow (INDEXDJX:.DJI). This index is looking ripe for a bounce in the coming days which could trigger the next major rally to new highs. You can plan this index through TF ("mini-sized") Russell 2000 Index futures contracts such as iShares Russell 2000 Index ETF (NYSEARCA:IWM), Direxion Daily Small Cp Bull 3X Shs ETF (NYSEARCA:TNA), and UMA exchange traded funds. [Editor's note: Unified Manged Account is an investment service which creates one account for all of an investor's holdings of separately managed accounts, mutual funds, ETFs, etc. The service is offered by several providers.]



Trading Conclusion

This setup looks very promising because the election is almost over and the Santa Clause rally is just around the corner. But know that some of the biggest drops in the market happen during times when the market is running the stops. It is a natural tendency to take big positions which things look great, but that is not how you should do it. Take calculated position sizes, knowing indexes could fall another 2-3% before putting in a real washout bottom.

Editor's Note: Chris Vermeulen offers more content at his sites, TheGoldAndOilGuy.com and Traders Video Playbook.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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