Small cap stocks need to hold breakout for more than two days to believe: BTIG's Jonathan Krinsky

Market Analysis of Small Caps - Small caps experienced a surge following a better-than-expected CPI report, similar to the situation 13 months prior in July 2024, when a September rate cut was priced in [2][3] - The sustainability of the small caps breakout is questionable, resembling momentum unwinds seen in July and post-election periods [4] - The Russell 2000 index is at 2300 and change, with a 52-week high of 2466, suggesting potential upside but caution is advised due to past false breakouts [5] - The current setup for small caps may not be significantly different from previous instances, warranting a tight stop-loss strategy [6] Healthcare Sector Insights - Healthcare sector is down 4% since the end of 2022, while the S&P 500 is up approximately 65%, indicating a substantial performance gap [6] - Biotech, a significant component of healthcare and small caps, is showing signs of recovery by clearing its 200-day moving average [7] - Healthcare is viewed as a potentially good contrarian trade, possibly offering more compelling opportunities than small caps in general [7]