Small caps are the cleanest setup in the video: the Russell 2000 has been hit by 5%+ September weakness, a 9% drawdown from its August 14 high, $3.3 billion of IWM outflows, and the worst quarter-long relative stretch vs. the S&P 500 since Q1 2020 — yet every prior 10%+ Russell drawdown since 1987 recovered. The strongest stock ideas are HIMS, PATH, SU, and ONDS, each framed as deeply corrected names with heavy short interest, improving fundamentals, and clear earnings or contract catalysts ahead. HIMS and PATH lean on huge prior selloffs plus tightening chart bases; SU and ONDS lean on high-growth revenue ramps, major partnerships, and crowded shorts. Sponsored pitch: 50% off Charlie’s Playbook membership, with Zip Trader 25 coming in a couple days and the discount expiring soon.
S&P 500 is about 7660, roughly 2% below the August 13 record and up about 12% year to date, while the Russell 2000 is down about 9% from its August 14 high and more than 5% in September alone.
With one day left in the quarter, the Russell 2000 is trailing the S&P 500 by about 9.5 percentage points; that gap has only happened four other times since 1987 — 1990, 1998, 1999, and Q1 2020 — and in 3 of those 4 cases Russell beat the S&P over the next 12 months.
IWM saw $3.3 billion of investor outflows, the biggest weekly exit of the year and a sign of the small-cap de-risking pressure.
The 10-year Treasury yield is about 5.28%, the highest since 2007, and the 30-year hit 5.57 on Monday, the highest since 2004, while the Fed’s September 16 hike to 3.75%–4% left open one more hike this year.
Higher oil from stalled U.S.-Iran Strait of Hormuz talks is framed as feeding inflation, lifting yields, and pressuring stocks in a small-cap “doom loop,” because smaller companies borrow more at floating rates and refinance more often.
Since 1950, every S&P 500 drawdown of 10% or more from an all-time high — 26 in total — eventually recovered to a new record; the typical bottom-to-high recovery took about 5 months.
Since 1987, every one of the last 18 Russell 2000 drawdowns of 10% or more recovered, and the last 17 such bottoms were followed by a higher Russell 2000 a year later 17 out of 17 times, with a median gain of 37%.
HIMS revenue in Q2 was $753 million, up 38%, subscribers were nearly 2.9 million, up 19%, and full-year guidance rose to $3.1 billion–$3.3 billion with Q3 guidance at $880 million–$900 million.
HIMS short interest is about 25% of float, roughly 53 million shares and $1.5 billion, down from above 40% earlier this year and already in a covering phase after shorts were hit by the Novo Nordisk suit over compounded weight-loss drugs.
HIMS fell from $72.98 in February 2025 to $13.74 on February 24, 2026, then printed higher lows at $18.75 in April, $21.53 in May, $24.24 on the FTC day in July, and $26.73 on September 11, while RSI reset below 30 near the lows and sits around 47 now.
HIMS built an inverse head-and-shoulders in May and June — left shoulder $25.35 on May 7, head $21.53 on May 19, right shoulder $25.40 on June 5 — broke the neckline near $30 on June 15, and ran to $39.5 by July 6 before forming a symmetrical triangle with highs of $39.5 in July, $34.46 in August, and $31.81 in September.
PATH revenue was $410.3 million, up 13% and above the $398 million estimate, ARR was $1.94 billion, up 12%, net new ARR was $37 million vs. $31 million a year ago, operating margin was 21.7% and beat by about 290 bps, and full-year guidance rose to $1.789 billion–$1.794 billion.
PATH has about 26.1% short interest, roughly 104 million shares and $1.3 billion, after falling from about $121 a year ago to about $12.27 today; it hit a $9.20–$9.50 floor three times, ran to $18.83 in early September, then dropped back on earnings.
PATH’s 100-day, 180-day, and 200-day averages are bunched around $12.30–$12.75; Monday’s downgrade pushed it under all of them to $11.57 before buyers closed it at $12.19, and RSI is around 34, close to oversold.
SU traded around $5.92 with short interest at 40.8% of float, about 165 million shares; Q2 revenue rose 45%, gross margin reached 45.1%, adjusted EBITDA was negative $9.6 million, and 2026 guidance was raised to $230 million–$260 million.
SU’s Live Person acquisition closed on September 4, adding a messaging platform and supporting a 2027 revenue path of at least $350 million; it also announced Oasis Edge last week, with LLM-powered voice agents on hardware and cars/devices offline, slated for late 2026 deployment.
SU has worked with 12 of the top 15 global banks, four of the top five global airlines, and four of the top five automakers; the stock is down about 73% from its October 2025 high of $22.17 and is testing a $5.65–$5.85 floor that held in March, July, and twice in mid-September.
ONDS reported Q2 revenue of $83.8 million, up more than 13x from $6.3 million a year ago and up 67% sequentially; full-year 2026 guidance was lifted to $525 million–$550 million, backlog reached about $613 million at the end of June, and another $105 million of orders was booked by August 10.
ONDS short interest is 44% of float, about 237 million shares and roughly $1.8 billion, versus about 4% a year ago; the stock is backed by about $1.4 billion of cash and investments against a roughly $4.4 billion market cap.
ONDS’ Cyberhawk renewed and expanded its SSE deal this week into a three-year agreement extendable by two years, including offshore wind turbine inspections, while Q3 revenue is guided to $140 million–$155 million and another near-doubling quarter is being positioned for November.