This Is Great News for Small-Cap Bulls

Soon...? Important News: We’ve just released the latest update of the True Market Insiders website, and we want to make sure you are getting all of the new benefits! The version of your web browser may no longer support our new website. But not to worry, you just need to follow these simple steps here. [Click here for the simple steps to take to get all the new benefits!]( Hi Reader, Only two more shopping days until Nvidia reports earnings... After Apple, Nvidia (NVDA) is the world's largest firm, by market cap. The company is so iconic your Uber driver probably knows that Nvidia will report earnings on Wednesday. He or she likely doesn't know why these quarterly releases are so important... But then neither does anyone else, apparently. You can see this by the hit-or-miss way the market responds to financial results. Company A beats estimates on earnings but not on revenue -- and the stock price rises (unless it falls). Company B beats on both and its stock price falls (unless it rises). Company C disappoints on everything, but the market likes what management has to say about the upcoming quarter... and the stock goes through the roof (unless it trades sideways). So what's really going on? With Nvidia, what's going on is the stock price has been moving higher, but on low volume. In the words of Chris Rowe, this is [a major red flag](. Says Chris, "you want to be aware of red flags in stocks like Nvidia, Microsoft (MSFT), Apple (AAPL) and Alphabet/Google (GOOG), because these individual stocks have a major influence on the stock market averages. They are very heavily weighted." In other words, as NVDA and those others go, so goes the market. If NVDA shoots higher after earnings, it will likely pull the market higher. But that move might be short lived, unless we see volume moving higher as well. If the S&P makes another brand-new high or two, but volume is lackluster, we're not really justified in calling the market strong. What would justify calling the market strong? Here are a few other things to watch. This past Friday, our most important indicator for gauging market risk -- the [New York Stock Exchange Bullish Percent Index (NYSE BPI)]( -- made a bullish move. The chart flipped from an "O-column," which indicates market weakness, to an "X-column," which indicates strength. There's more to it of course, and you can find out about it by [clicking over to read the posts we add every time the BPI makes an important move](. (Side note: About any wonky fonts and images you might see when you click over... As you probably know, we just rolled out a major update to our AI -powered web portal. and like all things AI -- cush as ChatGPT, a few bugs and glitches remain. Such as some stray code that makes the font and images look wonky. We're working through all those bugs around the clock. Thank you for being patient.) When we look inside the stock market, we can see how the various market sectors are arranged. This idea cannot be overstated. Market sectors are really mini stock markets in their own right. So it behooves us to know if a given sector is under the control of the bulls, aka, buyers of stock hellbent on pushing prices higher... Or under the control of the bears, aka, sellers who are out to push them lower. Using a proprietary tool called the US Industry Bell Curve, we break the market into 45 such sectors and we color the strong ones blue and the weak ones red. Right now the sectors are arranged like this. The bullish sectors outnumber the bearish ones 29 to 16. So the bulls are in control of about 65% of the stock market. Just two weeks (August 12th) ago the bulls only controlled about. Since we tend to focus on small and micro-cap stocks in this space every Monday, we're interested in how those stocks are doing. Here's some good news... The small-cap Russell 2000 ETF (Ticker symbol: IWM) is not only moving higher than the mega-cap S&P, it is moving up on heavy volume. So is the micro-cap ETF (IWC). By contrast, here's the S&P. It is making new highs, but, like NVDA, on low volume. Move your eye across the lower panel of the above chart. Notice how many more red volume spikes you see versus green ones. Now do the same with the charts for IWM and IWC. See what I mean? More green spikes than red ones. The following image shows the absolute performance of small-cap and micro-cap stocks versus large-caps. Small-cap stocks frequently (not always) lead the market higher. Last month we began seeing what looked like the early days of a sustained rotation out of large-and mega-cap stocks and into small-cap and micro-cap stocks. Over the past two weeks that trend stalled out. It could be resuming. That's great news for small-cap bulls. Read Next: Our Resident Digital Currency Expert – Marco Wutzer is issuing a critical market update and you're invited. In a special interview with Chris Rowe, Marco will reveal, the top coins that every investor should own right now – each Marco believes could return 1,000% or more. [The 3-Stage Genesis Cycle - save your spot by clicking here.]( DISCLAIMER ©2024 by True Market Insiders, LLC, Protected by copyright laws of the United States and international treaties. 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