This has consistently preceded further market upside
1/ In just 5 weeks, small caps flipped from underperforming the S&P 500 by 7% to outperforming it by 7%
2/ This kind of reversal has only happened 4 times in the last 35 yeras: 1991, 1998, 2008, 2020
3/ This signal is a sign of changing investor psychology
As small-cap stocks transitioned from unwanted to highly desired
4/ Small cap stocks are usually:
- Move volatile
- Sensitive to economic conditions
- Carry higher debt
- Have lower cash reserves
5/ Therefore, investors prefer small caps in a strong economy
But dump them when the economy is less stable
6/ When small caps outperform, it suggests:
Investors are shifting from a “risk-off” to a “risk-on” state
Find the latest insights on key Macro developments and their market impacts through our Macro Newsletter Video at:
7/ The last 4 times today’s signal triggered, the market moved higher in the following months
And small caps consistently outperformed the S&P 500
8/ That’s exactly why we have a bet on Small Caps in our Active Trades
We've closed 64 trades in 2024
With some exceeding 30-60% gains
And almost all losing trades under 5%
Find all our Active Trades with their Setups at:
9/ Thanks for reading!
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