We can’t ignore what’s happening in small-caps. After building a long, multi-year base, the group is now breaking out to new all-time highs.
As the year gets underway, the small-cap setup looks especially constructive, with price discovery just beginning rather than nearing exhaustion.
More broadly, this strength is an encouraging signal for the overall market. When the most speculative stocks in the investable universe are participating and leading, it typically reflects expanding risk appetite and a healthy market environment.
Earnings don’t create opportunity, the reaction does.
This Thursday, Kenny is walking through exactly how he looks for reversals after the initial move, when the real money starts showing its hand.
