How to Trade the Divergence in the Stock Market and Economic Data
Wealthpress Head Trader Roger Scott, Joy of the Trade Head Trader Jeff Zananiri and Future of Wealth Head Trader Lance Ippolito joined Midas Letter to discuss the divergence in the stock market to headline news and economic data.
20.5 million Americans lost their jobs last month. A decade worth of employment growth gone. But the stock markets has been on the rise. The financial experts tackle the tough question of whether or not economic data means anything and whether that is a new mindset traders/investors need to now adopt.
We look towards the movement in the iShares Russell 2000 Index (NYSEARCA:IWM) as a “canary in a coal mine” to understand how the broader market is reacting to the reopening of the U.S. economy. The Russell 2000 or IWM sends signals of confirmation to the broader market, including the S&P 500 Index (INDEXSP:.INX). If capital flows into the Russell 2000 for it to catch up to the larger S&P 500, we could see a continued rise in U.S. equities. This again is country, to the sentiment actually within the economy.
Watch the full interview as the trio give their insights and trade ideas for short-term plays to capitalize in these contrarian times.
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