Inflation (Stagflation)!
Small Caps weak!
The tape shows clearly: The reflation trade is over! The only two small cap trading systems that are showing strength are TECH and Materials. Everything else got dragged down with the Russel2000.
Strong:
Weak:
China ADRs are also still very weak (if they are strong = good indication that risk is on, but that is not the case!)
This market gets hold up by big cap growth names. Nothing more! Still time to make money, but only in the bigger names.
See —> Big Cap Momentum Trading System —>
Shorting systems start to build higher highs:
But:
The DIX had a good day the day before and its still above the GEX (bullish).
SqueezeMetrics: they bought the dip!
I am waiting for a nice rally to short weak big cap names with bad earnings estimates (ROC down).
Also, I am playing Qullamaggie https://www.twitch.tv/qullamaggie kind of setups in order to learn.
Let’s be honest, small caps are great in goldilocks and reflation, best comming out of a big drawdown of the markets. But inflation or deflation are just not for small caps.
So, what I am trying to do here: Get good at strategies, that work in inflation and deflation.
Do not wish for another tape because it was so nice in goldilocks or reflation.
That thing is over until further notice.
Trade what is in front of you!