Small Caps Lead Rebound from Italian Selloff

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The Italian invasion of U.S. markets only lasted for one day, as stocks recouped nearly all the ground that was lost yesterday.

The S&P climbed 1.27% to 2724 and the NASDAQ advanced 0.89% to 7462.5. Both indices made up for Tuesday's selloff. The Dow jumped 1.26% (or approximately 306 points) to 24667.8, which almost cancelled out the other day's loss of around 390 points.

The only index breaking new ground, though, is the Russell 2000, as small caps continue to flex their muscles. It gained 1.5% on Wednesday to a new record of 1648.

"Things calmed down considerably today, with a rubber band session clawing back yesterday's loss. All the while, the small caps are breaking out to new all-time highs. Keep going with the flow on that one and you'll have a profitable summer," said Dave Bartosiak, editor of Momentum Trader,Surprise Trader and Blockchain Innovators.

There were a couple big winners in the portfolios today. Healthcare Innovators cashed in a triple digit winner, while Home Run Investor banked a double-digit profit. The latter portfolio also added today, as did the Momentum Trader. Read all about today's action in the highlights section below:

Today's Portfolio Highlights:

Healthcare Innovators: Kevin was so confident in Align Technology (ALGN) that he made this maker of the Invisalign clear teeth straightener one of the inaugural picks of this portfolio back in May 2017. In that time, the stock has achieved more than the editor ever expected. With ALGN now above the average Wall Street price target, Kevin felt it was time to sell the name and take a nice profit of nearly 148%. He'll be buying it again if the stock slips back to about $300.

Home Run Investor: In just a couple of months, Intelsat (I) has jumped to a $16 stock from $4…and Brian Bolan doesn't think it's done moving higher. The company provides satellite communications services. The editor believes that it will have plenty of opportunities moving forward as technology continues to advance. He sees the stock getting up to $30 eventually, so the name was added on Wednesday in anticipation of a home run.

By the way, since the portfolio is fully invested, Brian needed to sell a stock to make room for this new addition. He decided it was time to part ways with HubSpot (HUBS) after more than a year in the portfolio. This inbound marketing software platform brought a nice 74% return to the service. Read the complete commentary for more on these moves.

Momentum Trader: Shares of Evertec (EVTC) have climbed from nearly $13 late last year to over $21 today. This transaction processing company reported a positive surprise of more than 51% earlier this month, which has the stock consolidating right at its 52-week high. Dave is hoping it can continue pushing higher to the next level, so he added EVTC on Wednesday with a 12.5% allocation. See the complete commentary for more.

Options Trader:"As I've mentioned before, the outperformance of the small-cap index is significant because it's usually considered a barometer of the market's appetite for risk and what can be expected to come in the broader market.

"The leadership position it has played this year has provided great foreshadowing for the current rally, and is one of the reasons for my steadfast confidence that the markets are poised for big gains ahead.

"It was also nice to see the market come back to their senses today after Tuesday's overdone selloff on an overblown political 'crisis' in Italy. That should have virtually no long-term impact on the market. And at this stage, it's much ado about nothing as far as stocks go." -- Kevin Matras

All the Best,

Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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