From the desk of Louis Sykes @haumicharts
Welcome to this week’s edition of Louis’ Look, where I share the lessons I’m learning while interning at All Star Charts. You can read the previous post here. Today, I want to touch on how the small elements are the most powerful, particularly in markets.
This weekend, I managed to catch a clear night to go out with my telescope to hunt down the stunning Orion Nebula and Andromeda galaxy, located a mind-blowing two and a half million light-years away. When I found them, they were lying in an empty and devoid section of the night sky.
A tiny sliver of darkness was hiding a sea of beauty and information.
As intense as that may sound, the market is in no way different.
Looking at the financial industry from the outside as an intern, I see people concentrating a disproportionate amount of time on FANG headlines, the recent Nikola gossip, and SPAC drama at the expense of potentially missing what the market is actually doing.
If you want to gauge where the market is positioned, look no further than Microcaps, Smallcaps, and Midcaps.
People seem to have an allergy of talking about these smaller market capitalization stocks, even though they’ve led most sizable market corrections over the last decade.
A recent example of this was when the S&P 500 was making new highs into September, while Microcaps were bucking the trend and making new short term lows. As the guys have said here, this is important because we need to dance with the girl who brought us here. [Read more…]