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Stocks are off to a hot start this year, with the S&P 500 racing to an 11% gain since the year began. But between Brexit, an inverted yield curve, and the Mueller report, there are many reasons to feel uncertain about the direction stocks could head next.
The iShares Russell 2000 ETF (NYSEARCA: IWM) now sits around $152, down from $158 a month ago. If we’re going to see a strong market rebound over the next month or so, expect to see IWM to get back up at least in the $155 range.
Earlier this week, the ETF dipped down to $150 before rebounding slightly. That’s key. If it falls below that milestone, that could easily send small caps – and the rest of the stock market – slipping further downward.
If IWM falls even further – below about $146 – that’s likely to indicate a significant downward correction for stocks across the board.
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That means you can forget about the news. Forget about what’s going on in Washington. Forget about what’s going on with The Boeing Co. (NYSE: BA). Forget about China and trade wars and Fed meetings and Brexit.
That number – IWM at $146 – is the one number you want to look for to indicate that it’s time to go into protection mode with your portfolio.
Of course, that gets us to the most important question: what to do when stocks are about to tank.
How to Protect Yourself and Profit in a Down Market
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