Did you hear? [BEWARE]

Investors cheered the rise of the Dow Jones Industrial Average and the NASDAQ. What they missed, unfortunately, is continued weakness in small-cap stocks. That should be a warning. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   Beware... Dear Reader, Did you hear? Did you hear? The Dow Jones added 236 points on Monday. Oh, happy day. The S&P 500 gained 1.3%. The NASDAQ added 1.88%. Can’t you just feel the optimism? The problem – of course – is that Friday’s rout was quite a whirlwind. First, a 950-point drop by the Dow came after news broke about the Omicron variant emerging in South Africa and spreading to Europe and Australia. Now, investors pushed stocks back a tad after President Biden said that lockdowns wouldn’t be necessary… just yet. Here’s the thing. If you follow Haven Investment Letter, you know that there’s only one metric that I follow. Market momentum. And market momentum has been NEGATIVE since Nov. 17. That’s when I said cash is your friend. So, market momentum went negative a full week BEFORE this variant emerged. That means that something else is driving the market lower. Even after today’s small bounce, more than 62.5% of all publicly traded stocks are sitting under their 50-day moving averages. Investors have been leaving mid-, micro-, and nano-cap stocks in droves over the last month. Have a look at this chart over the last month from Finviz.   Mega cap stocks added 1.5% against on Monday as traders piled back into the big names like Microsoft, Adobe, and Apple. But remember, the mega-cap stocks only represent a smaller percentage of the stocks on the S&P 500. Despite those gains in the mega-cap space, momentum remains negative on the S&P 500. Any improvement in market momentum will require greater capital flows into the large-cap space at the bottom of that index. But remember – The S&P 500 is NOT THE WHOLE market. That index represents just 500 of the total universe of roughly 8,300 stocks. The Russell 2000 – primarily comprised of small-cap stocks – is back in the sideways levels that plagued that index for months in 2021. And even then, there are still thousands of companies that aren’t part of both of these indices. The nanocap space is a very good place to watch if you’re trying to get a sense of broader market direction. But, unfortunately, these tiny stocks tend to attract speculative capital, and speculators have moved to the sideline right now. Remember – market momentum measures take the guesswork out of the market and let us rely on a very important position: Cash. Cash is a place I like to be during volatility. So if we see a selloff, and it will come eventually, cash will remain king. And as always, when market momentum goes back into positive territory, I'll make sure you will be among the first to know. Enjoy your day, Garrett {NAME} Chief Analyst, American Markets  Sponsored Message [VLEO: Set to Surge?!?!]( You will NOT believe how much Lou Basenese over at Trend Trader Daily thinks this tiny company will soar to! [(Click here for the full uncensored proof)]( In fact, as you'll see in his urgent alert, the same situation has played out many times before... [Click here now to learn how to ride the surge in VLEO >>]( © 2021 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) AND EMPLOYEES ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. 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