Small caps have the best chart of the three major US indexes, and money is flowing into the financials and biotech names the Russell 2000 is full of. The position was started on the post-FOMC flush and will be managed against the 9-day EMA, with the risk of exiting if Fed chair Warsh's press conference goes the wrong way. x.com 

US small caps are set to outperform as capital rotates down the cap structure, as it does when a bull market broadens. After years of lagging megacaps, small caps historically run hardest in the back half of a bull, once megacap leaders are extended. Breadth is widening, with over 30% of S&P 500 members beating the index in 2025, the best since 2021. The Fed is easing into strength, and rate cuts that lower discount rates and cheapen financing especially help small caps and long-duration growth. … Show more

A suspected crash and liquidity squeeze make small-cap longs unattractive initially. x.com 

US small caps stand to gain most as a liquidity regime shift begins. Long-dated Treasuries look to be printing a final bottom, and if yields reverse lower from below 4.8%, better liquidity expectations would support risk assets on cooling inflation, continued earnings and eventual Fed cuts. With SpaceX, new Fed leadership and midterms ahead, yields look set to fall, letting speculative assets catch up in a Goldilocks phase or end-cycle melt-up. Weakening earnings would make it a late-cycle trap. … Show more

The Shortlist targets companies it tags as pump-and-dumps, industry bubbles, constrained-float cases, potential fraud or overleveraged. Its Oct. 23 realistic-value estimates imply large downside, including 79% for ReAlloy, 53% for Critical Metals, 60% for Infleqtion and 62% for Quantinuum. x.com 

Growth stocks should keep outperforming small caps because rising rates now hurt small caps far more. Large-cap and AI-linked growth companies are cash-rich and lightly financed, while about a third of Russell 2000 debt is floating-rate versus roughly 6% for the S&P 500. As hike expectations returned, small caps' lead over the S&P 500 shrank from about 11 points in June to about 2, and IWM tracks long bonds far more than QQQ. The ARKK/IWM ratio has reclaimed its rising 20-month Bollinger basis. … Show more

Small caps should lead in the coming days, and high short interest in many names could fuel a short squeeze as shorts are forced to buy back. Names include Amprius, Lemonade, LightPath, Navitas, Ichor, Cohu, ACM Research, Aeva, Ouster, Ondas, BlackSky, Critical Metals, United States Antimony, Lightwave Logic, Arteris, Sidus Space, Satellogic and Babcock & Wilcox. x.com  x.com 

Financing risk makes AI-linked growth stocks unattractive to add here. Much of the money reaching suppliers such as Nvidia and Micron is financed, so harder funding would limit spending on chips, compute and memory. The buildout is not over, but stock prices could remain suppressed until it slows. A significant drawdown would make adding appealing; for many high-beta names with weak fundamentals and balance sheets, the highs look to be in. x.com 

US small caps are a losing game against investor psychology. They demand time spent understanding concepts no one cares about, only to end in 5% positions sold too early, and net worth stagnates despite good-looking screenshots. Large positions in cheap blue chips are a much better and easier game. x.com 

US large-cap equities are vulnerable because earnings have not caught up with total market capitalization. The market is farther from its 200-week moving average than at any point in 18 years, and cracks are starting to show; staying bullish ignores these risks. Rate hikes remain possible, oil is still high, and yields may climb again, so now is the time for caution. x.com  x.com