Watch This Leading Indicator Closely

Because of their size, small caps are often the first stocks to feel the moves of the market. [Shield] AN OXFORD CLUB PUBLICATION [Profit Trends]( [View in browser]( SPONSORED [$10 Tech Stock Multiplies Profit 12-Fold in One Year!]( [Shape-Shifting Smartphone]( Groundbreaking new tech is being hailed as a "technological tour de force." And one company is seeing profits pour in. [See why Samsung, Tesla and Apple are all reportedly now working with this $10 stock.]( Editor's note: Chief Trends Strategist Matthew Carr has found a company that could be the "Ultimate Growth Stock" of this year. It is growing net income faster than Apple (Nasdaq: AAPL), Netflix (Nasdaq: NFLX) and Tesla (Nasdaq: TSLA). It's also landed major partnerships with Samsung and Tesla. And for good reason... The tech this company has developed is mind-blowing! [For more information on this Ultimate Growth Stock, click here.]( - Kaitlyn Hopkins, Assistant Managing Editor --------------------------------------------------------------- IN CASE YOU MISSED IT [Video - Just What the Doctor Ordered]( [Watch Now]( [Why Small Caps Are a Leading Market Indicator]( [Matthew Carr | Chief Trends Strategist | The Oxford Club]( [Matthew Carr]( One afternoon in my 20s changed my outlook on investing, volatility and the markets. It altered the course of my life, even though I didn't know it would at the time. We were going through [a difficult, tumultuous stretch](. Everything was falling. I turned to my markets editor, nearly in a panic, and asked, "Should we tell our people to sell? Should we get out?" He calmly stood up, walked over to my desk and said, "Pull up [a historical chart]( of the S&P 500." [Chart - SP 500 Performance]( "Find me the Great Depression... "Show me Black Monday... "Show me Black Tuesday. Point out any of the darkest days in the market's history." I couldn't really. They were just blips on the graph. He said, "There will be down days, down weeks, [down months]( and even down years... But the market ultimately moves in only one direction: up." My editor said that if I remembered this, I'd always have a leg up on everyone else in the market when the inevitable hit the fan. Now, when that wisdom was imparted to me, the Great Recession hadn't happened yet. It wasn't even on anyone's radar. But that piece of advice changed my life. It altered my fortune and my future. It changed how I viewed volatility, sell-offs and panics. I no longer feared them. I welcomed them. And I recognized them for what they truly are: opportunities. There will be days where it feels like the [world is ending](. There will be days where there's red across the board. But in these moments, we need to be on the lookout for opportunities and reversals. SPONSORED [How to Grow Your Retirement Starting With $20]( [AG & BOR at table]( [Bill O'Reilly and a legendary stock picker just revealed the only way to grow your retirement starting with $20. Details here.]( The Small Cap Warning For many investors, 2022 has already soured their portfolios. But the first signs of what was to come actually appeared all the way back in November. Take a look at this chart. It shows the performance of the Dow Jones Industrial Average, the Nasdaq, the S&P and the Russell 2000 since then. [Chart - Broader Markets]( Right off the bat, in November, we see that the small caps on the Russell 2000 began bleeding red. That's a very important event to notice - and something you should take note of if it happens again in the future. Small caps are often considered [a leading indicator](. Since they are smaller companies, they potentially have more upside than midcaps, large caps or megacaps. But because of their size, they also carry considerably more risk. For example, a $5 stock moving to $100 is a potentially life-changing gain. But, as I always warn investors, lower-priced shares are closer to $0 than they are to $100. That highlights the risk that these investments can carry. Small caps are a leading indicator because when [optimism is high]( they tend to outperform. And investors are willing to take on more risk for potentially market-beating returns. But when uncertainty and caution seep in, small caps feel it first. In the chart above, we see that the Russell 2000 began selling off in late 2021. And the rest of the major U.S. indexes followed suit soon thereafter. By December 20, 2021, small caps entered 10% correction territory before bouncing higher to close out the year. The Russell's declines picked up speed again after the start of 2022. And we can see from the chart that the Nasdaq, followed by the S&P 500 and the Dow, did the same. But we just received a bullish indicator from small caps... one that could signal an "all clear" for the markets. The Small Cap Go-Ahead? On January 27, [the Russell 2000]( closed at 1,931.29. The small cap index hadn't closed at that low of a level since December 14, 2020. That figure was 20.9% below the index's closing high, which was set on November 8, 2021. That means that small caps had entered a bear market. Now, after that bear level was hit, the markets pivoted. The Russell, the Nasdaq, the S&P and the Dow all started to lift higher. It was [a signal]( that the selling pressure we'd seen had been exhausted. Small caps are leading indicators of changing sentiment. And the Russell hitting bottom could mean "risk on" is back in vogue. I always stress that [bear markets]( are measured in days, sometimes months. They're short-lived market phenomena. Bull markets, on the other hand, are measured in years, sometimes decades. Now, the bear market isn't officially over. But the rebound has begun. And sell-offs mean that [opportunities are bountiful](. Take advantage of them. Remember, your time horizon isn't a couple of hours or a day. Even if you're a day trader, you're building wealth for your future. That can mean five, 10 or 50 years from now. In those moments when the world feels like it's crumbling, take a breath. Make a shopping list of all the companies on sale that you can now own at a significant markdown. The markets eventually return to their mean. They ultimately head in only one true direction. And that's up. Learning that in my 20s changed my life. I've seen more sell-offs since then than I can count - both benign ones and global catastrophes. They're reminders to [keep a diversified portfolio]( and they provide opportunities to go shopping for bargains. Here's to high returns, Matthew P.S. I've found what might just be the most impressively run business I've ever seen in my career. This stock's net income has gone up more than 1,100% in the last 12 months compared with 2020. It's also at the forefront of cutting-edge technology and has 20,900 granted patents. And the best part? Right now, it's trading for just $10. 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