$IWM, small caps, not YET giving the "all clear"

IWM is the lone index still not in the clear 🚩 — backtesting its 200dma today and tagging the weekly mid-BB, just like in '22. Will it matter by week's end? If not, the bull is likely back across the board 🐂

This week's #CPI (Consumer Price Index) and #PPI (Producer Price Index) prints could significantly influence market direction across major indices — SPY, QQQ and IWM — especially with rate cut expectations in flux. 🧵Here's how:

1. Hot CPI or PPI (above expectations):
SPY: Likely to pull back as sticky inflation pressures broader S&P names, especially rate-sensitive sectors like real estate and utilities.

QQQ: Could see sharper downside—tech stocks (many of which are high duration assets) are highly sensitive to interest rate expectations.

IWM: Likely the hardest hit. Small caps suffer from tighter financial conditions and depend more on domestic borrowing costs.

🟥 Result: Bearish across the board, with small caps underperforming.


2. Cool CPI or PPI (below expectations):
SPY: Broad lift, particularly in consumer discretionary and financials.

QQQ: Strong rally—mega cap tech loves the prospect of lower yields.

IWM: Outperforms if cooling inflation suggests easing ahead, since it's more leveraged to rate cycles and domestic growth.

🟩 Result: Bullish, with small caps possibly leading a relief rally.


3. In-line CPI/PPI:
Markets may stay choppy or consolidate, with SPY and QQQ more stable.

IWM remains at risk of drifting lower unless there’s a strong dovish narrative from the Fed or other macro catalysts.

With small caps already lagging, this week’s inflation data could either validate its bearish divergence or spark a rotation rally if inflation

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