{"id":207015,"date":"2024-05-22T08:59:39","date_gmt":"2024-05-22T12:59:39","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=207015"},"modified":"2024-05-23T03:49:12","modified_gmt":"2024-05-23T07:49:12","slug":"chart-advisor-preparing-for-small-cap-move","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-preparing-for-small-cap-move\/","title":{"rendered":"Chart Advisor: Preparing for Small Cap Move"},"content":{"rendered":"\n<p>By <a href=\"https:\/\/cmtassociation.org\/presenter\/matthew-caruso\/\" target=\"_blank\" rel=\"noreferrer noopener\">Matthew Caruso, CFA, CMT<\/a><\/p>\n\n\n\n<p><strong>1\/ Small Caps Under Accumulation<\/strong><\/p>\n\n\n\n<p><strong>2\/ ACVA is Leading a Turnaround in Used Car Prices<\/strong><\/p>\n\n\n\n<p><strong>3\/ Net Highs on the Nasdaq Support Higher Prices<\/strong><\/p>\n\n\n\n<p><strong>4\/ AZEK Building Supplier Preparing for Much Higher Prices<\/strong><\/p>\n\n\n\n<p><em><sup>Investopedia is partnering with CMT Association on this newsletter. \u00a0The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.<\/sup><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-small-caps-under-accumulation\">1\/ <strong>Small Caps Under Accumulation<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"629\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2-1100x629.png\" alt=\"\" class=\"wp-image-207016 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2-1100x629.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2-700x400.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2-300x172.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2-768x439.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2-1536x879.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2.png 1825w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/629;\" \/><\/figure>\n\n\n\n<p>Despite dramatically underperforming all major indexes throughout 2023, the Russell 2000 small-cap index has begun showing signs of accumulation. The Up\/Down volume ratio in the chart below identifies net buying over a 50-day period with a value greater than 1.0. As you can see, all prior corrections occurred with an associated drop in the Up\/Down volume ratio below 1.0. This recent May correction had a different character and occurred with a backdrop of the ratio holding above 1.0. Coincidentally, legendary investor Stanely Druckenmiller just recently disclosed his new largest position to be call option on the Russell 2000.\u00a0<\/p>\n\n\n\n<p><strong>2\/ ACVA is Leading a Turnaround in Used Car Prices<\/strong><\/p>\n\n\n\n<p>COVID caused many never-before-seen situations, one of which was a surge in used car prices and the odd situation where you could sell a used car for more than a new car\u2019s list price. ACVA is attempting to redefine the wholesale used car market by bringing transparency to an incredibly opaque market. <\/p>\n\n\n\n<p>Management intelligently came to market with an IPO near the top of the used car market euphoria, leaving buyers of the stock with quick losses. Management has now forecasted in their recent quarterly update that they anticipate the market will finally begin to improve later this year. It appears investors believe them as the stock is close to a breakout from a classic cup-with-handle chart pattern and may once again be a leading indicator for used car prices.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"631\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1-1100x631.png\" alt=\"\" class=\"wp-image-207017 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1-1100x631.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1-700x402.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1-300x172.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1-768x441.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1-1536x881.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic2-1.png 1825w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/631;\" \/><\/figure>\n\n\n\n<p><strong>3\/ Net Highs on the Nasdaq Support Higher Prices<\/strong><\/p>\n\n\n\n<p>Having discussed net highs for the precious metal mining sector in yesterday\u2019s note, today we turn our attention to the Nasdaq. Similar to precious metal stocks, the Nasdaq is currently witnessing more stocks making 52-week highs vs. those making 52-week lows, resulting in a Net-positive number. This can be seen by the green columns below the chart.\u00a0 <\/p>\n\n\n\n<p>This positive reading continues to indicate that investors remain net buyers of equities and supports the notion of a continued uptrend for the Nasdaq.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"629\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2-1100x629.png\" alt=\"\" class=\"wp-image-207019 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2-1100x629.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2-700x400.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2-300x172.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2-768x439.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2-1536x879.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic3-2.png 1825w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/629;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-azek-building-supplier-preparing-for-much-higher-prices\">4\/ <strong>AZEK Building Supplier Preparing for Much Higher Prices<\/strong><\/h2>\n\n\n\n<p>It is expected to see a strong inverse relationship between the 30-year fixed mortgage rate and demand for building supplies. Therefore, the rise and fall of AZEK, a leading low-maintenance building products supplier, with the trends in mortgage rates seem appropriate. However, this relationship has recently diverged. <\/p>\n\n\n\n<p>Despite the increase in mortgage rates in 2024, AZEK has maintained its powerful gains from 2023. Looking past recent trends, AZEK has returned to test its 2021 all-time highs despite the mortgage rate having more than doubled since that time. This is likely supported by strong demand for its products, which will only increase should mortgage rates fall and boost building demand. A breakout in AZEK accompanied by a drop in mortgage rates will likely result in much higher prices for AZEK.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" width=\"1100\" height=\"629\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1-1100x629.png\" alt=\"\" class=\"wp-image-207018 lazyload\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/629;width:1078px;height:auto\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1-1100x629.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1-700x400.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1-300x172.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1-768x439.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1-1536x879.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic4-1.png 1825w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" \/><\/figure>\n\n\n\n<p><strong>About This Week&#8217;s Author<\/strong><\/p>\n\n\n\n<p><strong><a href=\"https:\/\/cmtassociation.org\/presenter\/matthew-caruso\/\" target=\"_blank\" rel=\"noreferrer noopener\">Matthew Caruso, CFA, CMT<\/a><\/strong>\u00a0is a member of the CMT association, having previously served as the president of CMT Canada. As a professional investor and former market-maker, he boasts an impressive track record, including holding the 9-month record in the US Investing Championship. Matthew&#8217;s expertise extends to Caruso Insights, a dedicated service aimed at educating investors on constructing and refining high-growth investment strategies. To explore his insights further, visit <a href=\"https:\/\/www.carusoinsights.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Caruso insights.com.<\/a><\/p>\n\n\n\n<p>&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-<\/p>\n\n\n\n<p>Originally posted on May 22, 2024<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Despite dramatically underperforming all major indexes throughout 2023, the Russell 2000 small-cap index has begun showing signs of accumulation. The Up\/Down volume ratio in the chart below identifies net buying over a 50-day period with a value greater than 1.0. As you can see, all prior corrections occurred with an associated drop in the Up\/Down volume ratio below 1.0. This recent May correction had a different character and occurred with a backdrop of the ratio holding above 1.0. Coincidentally, legendary investor Stanely Druckenmiller just recently disclosed his new largest position to be call option on the Russell 2000.  <\/p>\n","protected":false},"author":186,"featured_media":207016,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[14,18,6,8,9,22,23,26,3],"tags":[17135,17136],"contributors-categories":[13686],"class_list":{"0":"post-207015","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-etfs","8":"category-macro","9":"category-north-america","10":"category-region","11":"category-securities","12":"category-stocks","13":"category-technical-analysis","14":"category-text-articles","15":"category-traders-insight","16":"tag-acva","17":"tag-azek","18":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Preparing for Small Cap Move<\/title>\n<meta name=\"description\" content=\"Despite dramatically underperforming all major indexes throughout 2023, the Russell 2000 small-cap index has begun showing signs of accumulation. The...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/207015\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: Preparing for Small Cap Move | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"Despite dramatically underperforming all major indexes throughout 2023, the Russell 2000 small-cap index has begun showing signs of accumulation. The Up\/Down volume ratio in the chart below identifies net buying over a 50-day period with a value greater than 1.0. As you can see, all prior corrections occurred with an associated drop in the Up\/Down volume ratio below 1.0. This recent May correction had a different character and occurred with a backdrop of the ratio holding above 1.0. Coincidentally, legendary investor Stanely Druckenmiller just recently disclosed his new largest position to be call option on the Russell 2000.\u00a0\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-preparing-for-small-cap-move\/\" \/>\n<meta property=\"og:site_name\" content=\"IBKR Campus US\" \/>\n<meta property=\"article:published_time\" content=\"2024-05-22T12:59:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-23T07:49:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/pic1-2.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1825\" \/>\n\t<meta property=\"og:image:height\" content=\"1044\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Contributor Author\" \/>\n<meta name=\"twitter:card\" 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