Dear Reader,

Today’s late session rally, spurred by Mr. Jerome Powell no less, did well for the S&P 500. But it did even better for microcap stocks.

Take a look at the chart below, and you’ll see what I mean.

The S&P 500 (SPX) climbed another 2% today, but iShares’ Microcap ETF (IWC) closed 3.4% higher!

This is actually a big deal, because it shows that people are hunting for super-bargains again. In the chart above we can see that IWC (left-most panel) has a better looking, stronger candle than SPY (center panel).

The right-most panel features a relative-strength comparison between these two ETFs. This shows how much investors favored IWC over SPY. The big green candle tells it all.

That means it’s a great time to go looking for low-cost stocks that might rocket higher after getting hit by a catalyst.

Just like the trade on PetrĂ³leo Brasileiro (PBR) that allowed us to close out the first half today for 100% gains. These trades have been coming fast and furious for the past month. You should see the track record!

This week I’ll be in Chicago with my fellow traders including Mark Sebastian. We’re going to be sending out some cool trades along with high-value, real-time education. You won’t want to miss out!

Talk soon,

Chris Johnson
Quantitative Specialist, Penny Hawk


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