Microcaps Hold the Line

The press of popular opinion would have us believe that the rats are jumping ship. But "rats and mice" stocks are about to break to the upside!

Always look to see what the "rats and mice" are doing because those little things are always first to see the cracks! Those were the words of advise given to me by an old trader when I first got into trading in early 1997. He foresaw the Asian Tiger Crisis in 1997 and the LTCM crisis of 1998 by watching what I now term the "back end of the market". That is, microcap stocks which no one really takes any notice of yet they are the very stocks that are the first to sense problems in the house!

The press of popular opinion would have us believe that rats and mice of the US stock market are jumping ship. But in fact the complete opposite is occuring. Highly economically sensitive microcap stocks are "holding the line".

The more I look at the behavior of "rats and mice" stocks the more it looks as if they are about to break to the upside. I have been watching stock markets for some 15 years now and the Microcap ETF "IWC" looks to be in the process of completing its process of hammering out a long term bottom. Given that IWC has been locked in a bottoming process for some 6 months, a break above the 46 level would likely see microcaps move all the way back above the 52 level. I am quite sure this will happen over the coming weeks.


Continue to position yourselves for an across the board bullish breakout in US stocks.