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- Momentum Monday - The Shitstorm For The Bears Continues...Are Small Caps Ready to Join The Breakouts?
Momentum Monday - The Shitstorm For The Bears Continues...Are Small Caps Ready to Join The Breakouts?
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Welcome back to Momentum Monday!
In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:
Introduction and Market Overview
Middle East Tensions and Commodity Hoarding
Concentration of the S&P 500
Small Caps, Interest Rates, and Market Rotations
Cybersecurity and Defense Stocks
Reminder: Riley on my team created the ‘Trends With No Friends’ email which is my go to list every day to track what is working and what is not. You can get it for free here.
In This Episode, We Cover:
Here are Ivanhoff’s thoughts:
The large caps ETF, SPY is at all-time highs. The mid-caps ETF, MDY just broke out to new all-time highs from a few-month-long base. Small caps ETF, IWM outperformed significantly on Friday. The reason – interest rates finally started to stall. Rates are deciding the sector rotations in the stock market. If rates have a multi-day pullback, we are likely to see small caps, biotech, housing, regional banks, and crypto outperform while Big Tech takes a deserved break.
If the small caps ETF, IWM stays above 220 and begins an assault of its 52-week highs near 229, I’d focus on high-volatility stocks that have already started to break out or are setting up for a breakout – RDFN, AFRM, UPST, IONQ, SMR, AEHR, etc. They are fast movers and likely to do well in an environment that lifts most boats. The opposite is also true – those stocks tend to underperform significantly when small caps fall. In other words, they are a high-beta play.
The new earnings season has just begun. JPMorgan and Wells Fargo beat estimates and helped the financial sector to break out. XLF gained 2% and closed at all-time highs. Regional banks performed even stronger. KRE gained 3.5% and it is looking ready to test its 52-week highs near 60. Next week, we will see many more banks reporting, as well as some banner stocks like Alcoa (AA), Intuitive Surgical (ISRG), ASML, and TSM. The last two are leading indicators for the semiconductor industry. TSM makes all the chips for Nvidia, Apple, Qualcomm, AMD, Intel, Broadcom, Sony, and Marvel. ASML provides the machines used to manufacture chips.
And here are the charts discussed:





PS - Here is the latest ‘Trends With No Friends’ which covers ‘new highs and new lows’ and measures the followers (friends) on Stocktwits versus the prices. Subscribe here.
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