{"id":12708,"date":"2024-11-28T00:01:41","date_gmt":"2024-11-28T00:01:41","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/11\/28\/heres-why-the-small-cap-iwm-will-soar-nearly-70-by-the-end-of-2025\/"},"modified":"2024-11-28T00:01:41","modified_gmt":"2024-11-28T00:01:41","slug":"heres-why-the-small-cap-iwm-will-soar-nearly-70-by-the-end-of-2025","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/11\/28\/heres-why-the-small-cap-iwm-will-soar-nearly-70-by-the-end-of-2025\/","title":{"rendered":"Here\u2019s Why the Small Cap IWM Will Soar Nearly 70% by the End of 2025"},"content":{"rendered":"
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If you want big returns, I\u2019m convinced you\u2019ll find them in small caps. When I make bold predictions, and many of you know that I do fairly often, it\u2019s usually supported by long-term perspective. Most everyone has a negative bias towards small caps right now, because they\u2019ve underperformed so badly the past few years. But I use perspective on small caps just as I did in 2022 on the large caps. Let me use the S&P 500 as an example:<\/p>\n

Do you remember how bullish sentiment was at the end of 2021? We had the most complacent readings EVER on the 253-day SMA of the equity only put call ratio. And we had an \u201covershoot\u201d on the S&P 500 outside of the secular bull market channel. That left the likelihood of little upside and the potential of plenty of downside to test the \u201cmiddle\u201d channel level where most corrections and\/or cyclical bear markets end. At MarketVision 2022 in January 2022, I discussed the very real possibility of a 20-25% cyclical bear market decline to last 3-6 months and this was a chart that supported my theory. There were other reasons as well, but I\u2019m focused in this article on perspective and the benefits of having long-term perspective and not being overcome by short-term recency bias. We actually saw the cyclical bear market drop 28% and last 9 1\/2 months. It wasn\u2019t a perfect call, but it was pretty darn solid.<\/p>\n

Notice that those tests of the blue-dotted \u201cmiddle\u201d upslope line are excellent opportunities to jump in for what\u2019s likely to follow \u2013 a strong uptrend to return back to the upper channel line.<\/p>\n

So how does the small cap IWM look right now:<\/p>\n<\/p>\n

The blue \u201cpercentage change\u201d shows 52%, but this is measuring a 4-year period where price action simply follows the bottom of the slope. However, the maroon \u201cpercentage change\u201d shows what happens if you increase at a much, more rapid pace from the blue-dotted \u201cmiddle\u201d upslope line to the upper solid blue upslope line, in this case rising 112% \u2013 more than twice the rate if you simply go along for the ride with the slope. I believe the IWM has just begun a very significant rise back towards its upper channel line. I won\u2019t be surprised if the IWM hits 400 in 2025, which would represent nearly a 70% return. This type of a move would be no different that what we\u2019ve seen in the past on both of the above charts.<\/p>\n

Again, to make these types of predictions, you have to be willing to ignore what\u2019s happened recently (check your recency biases at the door), and focus on what the long-term channel is telling you. Could I be wrong? Absolutely. But I firmly believe small caps will continue the leadership role we\u2019ve seen of late, significantly outperforming the S&P 500 and NASDAQ 100.<\/p>\n

I\u2019m writing a special EB Digest on Friday and highlighting a small stock that I believe could TRIPLE over the next year. Our EB Digest is our FREE newsletter that requires no credit card. You may unsubscribe at any time. To claim this small cap stock on Friday, simply CLICK HERE<\/a> to sign up for our FREE EB Digest newsletter.<\/p>\n

Happy Thanksgiving everyone and happy trading!<\/p>\n

Tom<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

If you want big returns, I\u2019m convinced you\u2019ll find them in small caps. When I make bold predictions, and many of you know that I do fairly often, it\u2019s usually supported by long-term perspective. Most everyone has a negative bias towards small caps right now, because they\u2019ve underperformed so badly the past few years. But […]<\/p>\n","protected":false},"author":0,"featured_media":12709,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-12708","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/12708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=12708"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/12708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/12709"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=12708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=12708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=12708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}