02Nov3:54 pmEST

Lying in Wait

Biotech and small caps at-large in the Russell 2000 Index do indeed seem ripe to take the leadership baton into year-end. And many market players and pundits not only agree with that statement but are seemingly lying in wait, eager for a post-FOMC opportunity to strike those stocks hard on the long side to ride them into the holidays and prosper from seasonal, rotational, and liquidity tailwinds (if they are already not positioned for it). 

Indeed, that very sentiment is perhaps the most concerning to me--That too many speculators and strategists seem to be on the same page about this scenario. But if IWM breaks and holds above $235 while the XBI ETF, below, breaks $136.60 in the coming weeks, then I will not overthink it and simply play along with an eye on some of my favorite biotech setups like ISEE or SGEN. 

However, it is worth noting just how much of a consensus view the year-end rally and small cap seasonality seem to be in vogue. Should the likes of TSLA and NVDA seem the other side of gamma squeezes, we ought not rule out some surprises to the downside which reverberate throughout the whole market, include the beloved small caps. 

The Decadent Age of Outliers... Burning Time Until the FOMC

 
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