Are babies on the move?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
IWC trade ideas
$IWC Micro Cap Analysis 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 it is good progress that we are bouncing off of the bottom end of the regression channel I wouldn't get too carried away as it's still below an area of resistance. Also its good to note that the pervious bounces off the bottom end of the regression channel were also in confluence with that same area of support.
AMEX:IWC
Re-test of Aug 2018/ Oct 2020 Acummulation Range CreekAfter 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
IWC Next Rhombing Flag or Short Term Double BottomTwo 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.
US Micro-Cap Breaking Out?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 some of the wildest trades for 2022 and beyond.
You can see this is not the same position in China or Hong Kong.
In the short and immediate term, we are witnessing capital rushing to park in US assets as the ONLY alternative. The pressure to park capital in 'safe assets' which are not threatened by the nanny state in the Far-East, Middle-East, Russia and now to a lesser extent Europe while it remains hijacked via Schwab. This more or less exhausts the options that we have and has clearly pinned both the Hang Seng and Shanghai Comp:
Sure the "migration of capital" from East to West is underway but the threat of US losing its hegemony is a multi-decade process.
I will be looking to fade the highs in US Microcaps from October time to ride profit taking into Q1 2022 before we start chapter two. Interested to gage the interest levels for ETFs here, if there is enough we can start to establish some levels, calls, and invalidation zones for IWC together in the comments.
Micro-Caps $IWC Fail At Logical LevelDespite more than a 40% move off their lows, Micro-Caps still have lots of work to do... it will be important to see how price reacts to this area of potential overhead supply in the low 80's. This level is crucial as it represents the 2014-15 highs and 2018 lows. We saw the first try fail today. $IWC has achieved a higher momentum reading than any of the Large-Cap indexes but still has not been able to hit overbought.
Risk off week?The iShares ETF that tracks more risky micro-cap stocks - IWC - reached an important 161.8% extension of a prior move. I think we could see a pullback from here to re-test the breakout level around $90. If appetite for risk stays strong, it could be a short-lived pullback, or if investors reduce risk, this could suffer more than the main indices and their ETFs.