Small-Cap Stocks: Time To Party

 | Nov 21, 2017 11:09AM ET

Small-cap stocks tend to offer a bit more risk and reward. That equates to higher beta, which in turn tends to mean stronger returns when the broader market is healthy and weaker returns when the broader market is in the doldrums.

So where are we now? Likely at an important juncture.

Small-cap stocks as measured by the Russell 2000 and micro-cap stocks as measured by the iShares Micro Cap ETF (NYSE:IWC) are testing important support levels. Both indices rallied higher in August/September, breaking out above their 8-month trading range.