TACTICAL UPDATE --> IWM this am mirrors XLE on 4/23/2021 which rallied ~18% in 10 days Array ( [cookie] => 596a25-805399-724db3-06fc84-1cfaa6 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 208285 [user_id] => [reason] => [method] => ) 1 and can accesss
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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