Client Portal

While most are concentrating on the huge push back to AI and Mag 7, there has been some notable underperformance in DJIA, Equal-weighted SPX and also IWM vs. NDX today, and one can see IWM is right up against Ichimoku Cloud resistance, not dissimilar from RSP and DJIA. SPX to its credit is challenging all-time highs, but would be beneficial to see some broader-based rally and for today, Equal-weighed RSP0.39%  is down on the day. IWM0.32% , shown below, should face resistance, pull back over the next week and then turn back higher towards late Nov highs

Small-caps have not responded positively to the recent backing up in rates and the last couple days of weakness have suggested a brief move down to new monthly lows might be needed before the Russell 2000 ETF (IWM0.32% ) gets to support. I'll discuss this in tonights report but it appears still early to thinking this is bottoming

Small-caps have not responded positively to the recent backing up in rates and the last couple days of weakness have suggested a brief move down to new monthly lows might be needed before the Russell 2000 ETF (IWM0.32% ) gets to support. I'll discuss this in tonights report but it appears still early to thinking this is bottoming

US Equities have slowly started to show more strength, but volume is understandably quite light, and we're still seeing four of the 11 sectors lower today, while Outperformance is being driven not by Technology, but by Discretionary and Consumer Staples as WBA, CVS, TGT, SBUX all up more than 2%. While gains are more muted in SPX and QQQ today, there is some good price action in Small-caps with IWM0.32%  higher by +0.60% and has moved to new multi-day highs. While today is a short-term positive development, a bit more will be needed to have faith that IWM has bottomed. Near-term resistance lies at 227, then 231 for IWM on this bounce

IWM0.32%  has now closed down from its opening price on nine of the last 10 trading sessions, down for 5 of the last 7 trading days, yet has merely given up 50% of the rally from mid-November. Thus, while it has weakened at a time of Large-cap Tech strength, i view the recent consolidation as being pretty benign and not all that meaningful. TD indicators show IWM to be one day away from generating a TD buy setup, and my expectation is the the maximum amount of downside happens to 233.6 before this starts to turn back higher. Overall, tomorrow's CPI print very well could prove to be the catalyst for the low to this minor pullback in US Equities that's occurred, and from an absolute basis, IWM is getting to a very attractive area of support which should occur this week.

In our view, Thanksgiving rally Intact

• NVDA-0.32%  earnings reported
• Whether market happy or sad
• It’s behind us
• Meaning it’s a "clearing event"

Please BUY THE DIP (if there is one) IWM0.32%  QQQ0.10%  SMLR-16.52%  MSTR-2.08%  KRE-0.48%

Markets are selling off on ‘WWIII’ worries as Putin discusses authorization of nuclear weapons

• VIX is up to 16
• But as shown below, below 23 seen weeks ago

Tells me stocks over-reacting to headlines since VIX low. Meaning, investors likely buy this dip. IWM0.32%  QQQ0.10%  SPY0.45%  BTC

IWM0.32%  is slightly under 230-231 that i mentioned last night, but as we can see, this remains quite good structurally as a risk/reward and has not done any damage, despite being under that support. Price is approaching the prior peak from 10/16, so my view is this holds, which is 227.17 even if 230 has been fractionally undercut. IWM held prior all-time highs but should now stabilize and rebound into Txgiving, likely starting Monday or Tuesday of next week

Small-caps showing huge outperformance today as are Mid-Caps, but IWM0.32%  now lies just $3 from its all-time high peak at $244.46 from November 2021. This is a short-term target of mine, and expect a stalling out near 244 sometime this week. DeMark daily Exhaustion will show a TD Combo 13 countdown signal potentially tomorrow and TD Sell Setup count will be complete potentially in three-to-four trading days. (As of now, a TD Sequential 13 Countdown" signal is present but not confirmed) Given that these signals are nearly complete and might be triggered just as prices near all-time highs, i feel this gives them more significance. Thus, IWM likely will stall out at 244-244.50 sometime this week, but at present, today's move is still constructive towards thinking this can move there and hit that resistance zone.

Small caps gapped up this morning on the Trump win, with IWM0.32%  exceeding 227 which should set the path for 244 to challenge former all-time highs. While a pullback from this morning's surge might seem reasonable to some given the extent of the breakout, if IWM closes in the upper quartile of today's range, then i expect additional rallies back up to former highs without much immediate consolidation. Make no mistake, a large three-month triangle breakout is quite positive technically, and should set the path for near-term gains and Small-cap Outperformance vs. Large-cap. I discussed reasons for this outperformance ahead of today's move based on the momentum shift and MACD crossing back to positive on relative charts of IWM vs. RSP (For those that missed, kindly refer to last night's Technical missive from 11/5/24)