An amazing tidbit of information from this market has been the rise of micro-cap stocks. IWC has been on an absolute tear! Since last year IWC is up nearly 26% on a total return basis. If you bought on 1/2/2018 the ETF is up more than 11% on a total return basis. The ETF is also up more than 17% from its February low. How many would have been paying attention to Micro Cap stocks this year? Small caps have enjoyed a nice run too just slightly behind Micro Caps. This situation would lead us to believe inflation expectations are definitely creeping higher with money managers pushing into smaller/micro cap names.
Even with the run up we still do not see extreme levels in bullish sentiment. AAII Bulls ended the week below 40% at 38.93%. Bears ended the week at 26.72%. It is a little surprised to see bears up above 25% given the rise in stocks. However, we still see bearish articles hitting financial media. Thursday morning Buffett stated the economy was in the 6th inning with its power hitters up to bat. While we certainly don’t want to rely on a macro stance from one man it is interesting to hear Buffett remain bullish on the economy. We simply do not know any better and do not care to know. Price action continues to indicate we are in an uptrend and we’ll continue to operate as such.
This has been a solid week and we look to keep this momentum going.
