Bear flag has completed on the spread. Rebound is possible soon.
Micro-caps = are like real babies they are just starting to walk and talk all of them full of potential Pros for a large upward move 1)FED peak rates 2)10y% lower = risk on 3)Soft landing 4)Inflation is behind (for now...) 5)Heading into elections historically market goes up and babies should too as well
Here's my take on the AMEX:IWC Microcap ETF. The micro cap ETF is bouncing off the bottom end of a regression channel, however a warning signal is that it's still below an area of resistance. You can see that on that area it used to be a prior support but it has since been broken. As you know prior support becomes resistance once the level is broken so although...
I would say I would rather be an owner of IWC over QQQ. This could get ugly for QQQ if IWC breaks lower.
As with all indexes, the last squeeze before crashing into the end of the year.
Ratio between IWC ( Microcap ETF ) and DIA ( Mega Cap) - picked this up from a presentation by Gundlach of Doubleline Funds. A good gauge of risk appetite. You can clearly see the blow off in Nov 20, Last Hurrah in Nov 21 and where we are now.
After breaking the near-term Accumulation/Distribution Range Ice to the downside, Path of least resistance is a retest of the Previous Accumulation Range Creek (Origin of Breakout) before continuing the Uptrend. Distribution Range Breakdown 261.8% Measured Move Target @ 94.20
Two Legs Sideways to Down objective met. 05 Mar 2021 to 18 Jan 2022 Big Picture Distribution Range breakdown Black Swan Measured Move 1:1 Target @ 108.75 Short term Double Bottom for a Simple Corrective WXY or Complex WXYXZ before Downtrend Continuation.
Taking the ratio of the micro vs small cap etfs gives a pattern which looks to be forming a bullish structure. The second impulse could move it to the range shown.
Here in this position, it is clear that intensive work has gone into supporting the entire global recovery. Moreover, we could already count the resilience in credit as ideal results from the covid siege. But now I want to focus on the US and small caps in particular are getting to work and the advance is leading to a more palpable exhaustion leg and opening...
Any bounce should be used to re balance towards big caps
$IWC vs $IWM, vs $SPY vs $QQQ
At the point of last session's reversal $IWC, $SPY