TACTICAL UPDATE --> IWM this am mirrors XLE on 4/23/2021 which rallied ~18% in 10 days

STRATEGY: IWM this am mirrors XLE on 4/23/2021 which rallied ~18% in 10 days
Yesterday, we sent an alert to our clients about small-caps, IWM ETF as a proxy, as potentially establishing a tradeable low. 

- we said IWM needed close below $222.59
- if true, the daily DeMark count (v1b) would post a sequential '9'
- and a rally should start by 5/19, or this was an "invalid call"

- IWM closed at $213.20, so indeed we got the desired close

- this am, we might see "margin calls" so IWM could actually slip in the morning session, this is called an "undercut"
- that would be very positive if this took place = takes out the last sellers



STRATEGY: Tradeable low in place, with multiple factors explaining why IWM could rally ~10% over the next two weeks
So, we are sending this alert, because we have a fairly high conviction IWM could start to rally this am, and gain as much as 10% over the next two weeks.  Let me explain:

signs of capitulation...
- put-call ratio for equities hit 0.63, and this is a sign of massive "protection" seeking = countertrade buy signal
- VIX surged ~80% over 3 days, usually a sign of a bottom (see our comments earlier this week)  = countertrade buy signal
- tax day is 5/15/2021, and given T+3, investors needed to sell yesterday to pay taxes on 5/15 = selling dissipating today
- nearly 90% down days as nearly all stocks fell

Positive DeMark setup for IWM...

- daily DeMark sequential '9' = possible buy signal
- daily DeMark combo '13' on IWM/SPY = strong strong buy signal

- the IWM/SPY '13' mirrors the '13' seen on XLE/SPY on 4/23/2021
- recall, we sent an INTRADAY FLASH on 4/23/2021 on XLE on that date
- in 10 days, XLE rallied 18%

That latter point is key.  We think IWM is set for a possible surge higher over the next 10 days.  This is a high-risk and tactical call.  So we are not saying "bet the farm" but it is a "back up the truck moment"



...IWM/SPY DeMark '13' = strong signal
IWM/SPY daily DeMark count registered the '13' (purple 13).  This is a sign of exhaustion of trend.  This is relative to S&P 500.

- so this is a sign that small-caps should start outperforming
- small-caps are an epicenter proxy, so this is a positive sign for Cyclicals
- this mirrors the '13' seen on XLE/SPY on 4/23/2021




...On 4/23/2021, XLE/SPY posted the same exact '13'You might recall we sent out this nearly identical alert on 4/23/2021 for XLE (S&P 500 Energy ETF).  And at that time, we made the argument that  XLE would start outperforming, to catch up with the surge in oil prices.

- this is marked below (purple 13)

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