Hey Market Pilots,
It has been a long few months since we have seen the small caps set up strong. The Moxie IndicatorTM subscribers had a really great run with small caps from November to February and then they all pulled back. Some small caps really imploded ─ or at least that’s what it looked like on the lower time frames.
However, if you step back and zoom out, many of the stocks I follow really just pulled back to support on their monthly and weekly time frames. These are large time frames and can be difficult to assess their scale when we are used to operating on something like the hourly charts. Since they have been coming into that larger time frame support, I have been guiding the Moxie IndicatorTM subscribers as to how that looks on the lower time frames so they can see the detailed picture.
But how about the index itself? Below are two screenshots of the Russell 2000 (IWM). The first is the daily time frame and I have pointed out with the double arrows where price has pulled back into the daily 50 simple moving average (SMA). This is typically support, and so far that is true as price has strongly bounced off it for now. This is exactly what I teach the subscribers about the “first move” versus the “second move.” Also note the positive divergence which has formed on the Moxie IndicatorTM.
In the next screen shot (pictured below), I took away all the moving averages other than the hourly 200 SMA. This is to remove the clutter and show you something I believe is new and the beginning of the next upward trend. First, note the double bottom on price with the positive Moxie IndicatorTM divergence. Then note how the hourly 200 SMA is now turning up and price just bounced off of it. I pointed it out with the double arrows which are in the same location as those on the daily screenshot above.
Sure looks to me like things are changing and getting into gear for the small cap index. This also coincides with what I am seeing across the board with individual small cap tickers and how I have been demonstrating the process of them turning from a multi-month pullback into a new possible uptrend. If this all pans out, then the fun is only beginning.
Your Profit Pilot, TG