NEW YORK ( TheStreet) -- Small-cap stocks caught a bid on Monday after madame Fed Chairman Janet Yellen's dovish speech renewed risk appetites and belief in the continued bull market. But investors on StockTwits saw reason to be wary.
iShares Russell 2000 (IWM) rose nearly 2% by the end of trading. Direxion Daily Small-Cap Bull (TNA) an ETF that seeks to return three times the gains of the small caps it tracks, rose nearly 6%.
However, most investors said that the action was just a knee-jerk positive reaction to Yellen easing fears of a rate hike early next year. They warned that it was unwise to bet on hyper growth in small caps when the underlying economy still showed signs of struggle. They also said that valuations of companies with market capitalizations of less than $2 billion needed to come down, particularly those of speculative biotech firms with drugs awaiting approval.
-- BumblebeeCharts (@bumblebeecharts) Mar. 31 at 01:18 PM
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.