Republic Risk: Can the Russell Crack Higher on Blowout Q3 GDP?

Third Quarter GDP came in at 5.2%, proving yet again that government spending and weak Quantitative Tightening continue to spur spending. When you run a huge deficit, you'd better have growth.

Equity Index Strength Is GREEN on the S&P 500 and GREEN on the Russell 2000

Each morning, we assess the full flows of the market by measuring statistical metrics on a very specific number of stocks to determine broader sentiment and the momentum trend. When these readings turn red, we focus on cash, build trades around positive sectors, or take inverse positions against indices. When it is positive, we focus on short-squeeze stocks, companies with improving fundamentals, and trading/investing around the actions of corporate insiders.

We’re waiting for the Russell 2000 to crack higher, as its performance has lagged the Nasdaq and S&P 500 since the reversal in late October.

While there’s been a strong rebound in the Russell 2000 ETF (IWM), there appears to be much more room to run. Today, we’ll have an important GDP estimate for the Third Quarter, followed by inflation numbers tomorrow.