Last week,$羅素2000指數主連(2406)(RTYmain.US)$gained 6% (top right as highlighted in yellow) and was the best performer among the 4 major US indices, followed by$納斯達克100指數主連(2406)(NQmain.US)$,$標普500指數主連(2406)(ESmain.US)$and$道瓊斯指數主連(2406)(YMmain.US)$. Both$微型羅素2000指數主連(2406)(M2Kmain.US)$and$道瓊斯指數(.DJI.US)$just broke out from the re-accumulation structure while$標普500指數(.SPX.US)$and Nasdaq travels within a well define up channel and currently hit the channel's overbought line. Would we see a rotation from the S&P 500 and$納斯達克綜合指數(.IXIC.US)$to the Russell and the Dow Jones? Let's focus on the daily chart of the Russell 2000 index futures (RTY) as shown below: An apex formation has formed since July 2021 and there is something unusual about this triangle pattern. Normally, while the price is consolidating within the triangle (forming lower high and higher low), we will notice decreasing of the volume together with the contraction of the volatility (e.g. the price spread of the candles are getting smaller from left to right hand side of the triangle). In this case, despite the volatility is getting lower, the volume is expanding on every down wave, suggesting lots of selling. Yet, what's the results? A higher low throughout from Aug till Nov 2021. This suggests that there was supply absorption going on while the selling happened. This is very constructive for a bullish scenario because the "strong hands" step in to support the price on every reaction and to scoop up the bargain. At the end of Oct 2021, there is an attempt to breakout of both the triangle and the horizontal resistance at 2310 followed by a shallow pullback and reversal, which marks the last point of support (LPS) of the accumulation structure before the sign of strength rally breaks above the structure. The supply level is especially low from the previous reaction suggests that the absorption is completed and ready to markup. As heavy supply has been absorbed within the triangle pattern, we might not expect a backup action coming back to test the axis line where the resistance-turned-support around 2310–2370, instead the backup action could happen at higher ground. The breakout of the Russell 2000 gives the first confirmation of the scenario of possible rotation from big cap stocks to small cap stocks. A Quick Guide to Get Exposure to Small-Caps The easiest way to participate the small caps without worrying about stock picking is via the ETFs. Feel free check out$iShares羅素2000指數ETF(IWM.US)$,$羅素2000成長股指數ETF-iShares(IWO.US)$,$羅素2000價值股指數ETF-iShares(IWN.US)$,$SPDR S&P 600 Small Cap ETF(SLY.US)$,$SPDR S&P 600 Small Cap Value ETF(SLYV.US)$,$SPDR S&P 600 Small Cap Growth ETF(SLYG.US)$. If you want to take it to the next level to beat the ETF, just explore the individual stocks within the those ETFs and pick those that outperform the market, sector and group with accumulation structure and wait for the right trade setup that suits you. For example,$Marathon Digital(MARA.US)$just about to complete the Wyckoff accumulation structure and is a potential candidate to ride on the strong trend of$Grayscale Bitcoin Trust(GBTC.US)$.
微型羅素2000指數主連(2406)討論區
Key Points
- Why there is heavy accumulation in Russell 2000 ( $iShares羅素2000指數ETF(IWM.US)$ ) via the apex formation.
- How to anticipate if a potential rotation will happen from $標普500指數(.SPX.US)$ , $納斯達克綜合指數(.IXIC.US)$ into $道瓊斯指數(.DJI.US)$ and $微型羅素2000指數主連(2406)(M2Kmain.US)$
- Why the indices could be in a vulnerable condition and what to expect.
- Using Wyckoff's law — efforts vs results to interpret the supply absorption and judge the timing of the up swing.
- Sector ETF to focus: $工業指數ETF-SPDR(XLI.US)$ $WilderHill清潔能源ETF-Invesco(PBW.US)$ $美國房屋建築業ETF-iShares(ITB.US)$ and watch out for the extensive run in $半導體指數ETF-VanEck(SMH.US)$
- For small cap, feel free to explore $羅素2000成長股指數ETF-iShares(IWO.US)$ $iShares羅素2000指數ETF(IWM.US)$ $羅素2000價值股指數ETF-iShares(IWN.US)$
Watch the video below
Both $微型羅素2000指數主連(2406)(M2Kmain.US)$ and $道瓊斯指數(.DJI.US)$ just broke out from the re-accumulation structure while $標普500指數(.SPX.US)$ and Nasdaq travels within a well define up channel and currently hit the channel's overbought line. Would we see a rotation from the S&P 500 and $納斯達克綜合指數(.IXIC.US)$ to the Russell and the Dow Jones?
Let's focus on the daily chart of the Russell 2000 index futures (RTY) as shown below:
An apex formation has formed since July 2021 and there is something unusual about this triangle pattern. Normally, while the price is consolidating within the triangle (forming lower high and higher low), we will notice decreasing of the volume together with the contraction of the volatility (e.g. the price spread of the candles are getting smaller from left to right hand side of the triangle).
In this case, despite the volatility is getting lower, the volume is expanding on every down wave, suggesting lots of selling. Yet, what's the results? A higher low throughout from Aug till Nov 2021. This suggests that there was supply absorption going on while the selling happened.
This is very constructive for a bullish scenario because the "strong hands" step in to support the price on every reaction and to scoop up the bargain.
At the end of Oct 2021, there is an attempt to breakout of both the triangle and the horizontal resistance at 2310 followed by a shallow pullback and reversal, which marks the last point of support (LPS) of the accumulation structure before the sign of strength rally breaks above the structure. The supply level is especially low from the previous reaction suggests that the absorption is completed and ready to markup.
As heavy supply has been absorbed within the triangle pattern, we might not expect a backup action coming back to test the axis line where the resistance-turned-support around 2310–2370, instead the backup action could happen at higher ground.
The breakout of the Russell 2000 gives the first confirmation of the scenario of possible rotation from big cap stocks to small cap stocks.
A Quick Guide to Get Exposure to Small-Caps
The easiest way to participate the small caps without worrying about stock picking is via the ETFs. Feel free check out $iShares羅素2000指數ETF(IWM.US)$ , $羅素2000成長股指數ETF-iShares(IWO.US)$ , $羅素2000價值股指數ETF-iShares(IWN.US)$ , $SPDR S&P 600 Small Cap ETF(SLY.US)$ , $SPDR S&P 600 Small Cap Value ETF(SLYV.US)$ , $SPDR S&P 600 Small Cap Growth ETF(SLYG.US)$ .
If you want to take it to the next level to beat the ETF, just explore the individual stocks within the those ETFs and pick those that outperform the market, sector and group with accumulation structure and wait for the right trade setup that suits you. For example, $Marathon Digital(MARA.US)$ just about to complete the Wyckoff accumulation structure and is a potential candidate to ride on the strong trend of $Grayscale Bitcoin Trust(GBTC.US)$ .
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