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Today we will be covering...
Today, we will have a deeper look at small capitalization stocks, so-called small caps, or, as some traders refer to them, small “craps.”
Specifically, we will analyze the futures of the Russell 2000 Index, RTY.
Both Free and Pro newsletters will be on the longer side as we have a lot of interesting updates.
Small Caps Futures - RTY
There is a sequential-9 DeMark sell signal on the daily RTY chart.
Wanted to check DeMark signals because he issued a bearish call last week.
Just be aware that DeMark signals may be early sometimes.
My preferred Elliott Wave count is shown below.
RTY seems to be completing wave (v) or circle-c of minor A 1) hitting the 50D MA resistance, and 2) green 100% Fibonacci level where circle-a is equal to circle-c, which is an ideal Fibonacci relation for corrective waves.
Thus, RTY may ideally start a pullback in wave B in this region.
Sentiment & Technical Analysis
The CNN’s Fear & Greed Index declines from 47 to 43, despite a very strong stock market day?!? Intriguing!
The percentage of stocks above the 20-day average is comparable to the July’25 peak, and above the February stock market peak.
This warns of short-term overbought and a potential pullback, but not necessarily of an immediate continuation of the bear market.
Notice that some consolidation followed the Aug’24 peak in this indicator, and the stock market continued to advance for several months.
Never place too much weight on any single indicator.
We want multiple indicators and methods to send the same message, as in BraVoCycles’ methodology.
Some sentiment signals are intriguing.
Hedge fund managers are bearish.
But retail investors are buying hand over fist.
BraVoCycles on X
Consider following me on X (former Twitter) in addition to the newsletter, as I often post valuable information there in real time between the newsletters.
The often-referenced weekly surveys of 150,000 AAII members (of those who complete the survey) show a bearish sentiment of over 50% for ten consecutive weeks, which is very rare.
JPMorgan is getting bearish.
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