Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Will the Generals follow the Troops?

by March 24, 2023
March 24, 2023
Will the Generals follow the Troops?

Small-caps are leading the way lower and breadth indicators are showing some serious deterioration under the surface. Large-caps are holding up for now, but keep in mind that weakness in small-caps foreshadowed the January 2022 peak in SPY. Today’s article will compare price charts for SPY and IWM, and then look at the bearish signal in the Composite Breadth Model.

Small-caps are leading the way lower because the Russell 2000 ETF (IWM) and the Russell Microcap ETF (IWC) are in downtrends, per the Trend Composite. Also note that IWC recorded a 52-week low this week. The chart below shows IWM falling from November 2021 to June 2022 and then consolidating with a large Symmetrical Triangle. A consolidation after a large decline is typically a continuation pattern that represents a rest within the bigger downtrend. IWM broke the triangle line and this signals a continuation lower.  

Note that IWM peaked on 8-November-2021 and SPY peaked on 3-January-2022, some two months after IWM. This means IWM led the way lower and foreshadowed the market peak in January 2022. Flash forward to March 2023 and we have IWM leading lower again. SPY remains well above its December low and is down just .78% in March. IWM, on the other hand, closed below its December (closing) low on Thursday and is down 9.53% in March. The chart below show SPY breaking wedge support and this break is bearish.

The generals are likely to follow the troops. The indicator window on the chart above shows the Composite Breadth Model turning bearish on March 13th. This model uses fourteen breadth indicators from the S&P 500 and S&P 1500. There are many more small-cap stocks (troops) than large-caps stocks (generals) and this means breadth indicators reflect performance for smaller stocks. SPY is a market-cap weighted ETF that reflects performance for large-caps. Even though the generals (SPY, QQQ) are holding up, the troops (small-caps) are retreating and I expect the generals to follow.

The Composite Breadth Model (CBM) is our main market timing tool at TrendInvestorPro. This model measures the weight of the evidence for the stock market as a whole and acts as our market filter for trend and momentum strategies. Whipsaws happen, but our quantified results show that market filters improve returns and greatly reduce drawdowns over the long-term. Click here to learn more about our trend-momentum strategies and mean-reversion strategy for trading ETFs.

The Trend Composite, ATR Trailing Stop and nine other indicators are part of the TrendInvestorPro Indicator Edge Plugin for StockCharts ACP. Click here to take your analysis process to the next level.

—————————————

0
FacebookTwitterGoogle +Pinterest
previous post
UK interest rates rise to 4.25% after Bank of England decision
next post
NVDA Stock: Waiting For a Big Plunge?

You may also like

BONDS & CASH – But Can We Find...

September 8, 2023

How Interest Rates Are Squeezing Home Buyers

September 23, 2022

Chart and Trend Signals Align for Datadog

June 23, 2023

Week Ahead: NIFTY Likely To See A Buoyant...

October 30, 2022

MEM TV Special: Characteristics of a New Bull...

October 5, 2022

Week Ahead: VIX At A New Multi Year...

July 29, 2023

Typical Tesla STALLS Out at 50-Day Moving Average

September 1, 2023

MEM TV: S&P 500 Breaks Key Support!

December 17, 2022

One Month of Positive Seasonality Remaining — OBV...

March 28, 2024

When You See Amazon Turning Around Beautiful Things...

March 31, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • America’s Not-So-Secret Secret Police

      August 7, 2025
    • Poll: Nearly 1 in 4 Americans Think They Have a Personal Social Security Account

      August 7, 2025
    • Republican senator claims RFK Jr. mRNA vaccine decision undermines Trump agenda

      August 7, 2025
    • Who is Anita Dunn? The Biden confidante who clashed with Hunter grilled in House autopen probe

      August 7, 2025
    • Case v. Montana Brief: Limit Loopholes to the Fourth Amendment

      August 7, 2025
    • Trump opens $9tn US retirement market to crypto in landmark executive order

      August 7, 2025

    Categories

    • Business (8,704)
    • Investing (2,184)
    • Politics (16,333)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved