What's up youtube? Oh man, what is up everybody welcome to trace trades. We have technical analysis and different stocks in the stock market, as well as potential buy holders. Sell opinions on these. Given stocks like this by saying that i'm not a financial advisor and we're experts so take away the grain of salt, let's get into the video.

So today, my friends, my family, my fellow guerrilla gang we're gon na, be talking about small cap stocks and there's been a lot of question. I've seen a lot of people discuss this hey. How come the small cap stocks doing bad? How come this small cap stocks doing bad xyz, xyz xyz down the list? You go down the list, you go they're all freaking suffering and i kind of want to talk about some of the different uh. You know facets that play into why small cap stocks are suffering.

I've got some examples pulled up for you right. These are ones that i think are decent companies. I think exxon is a good company, httc bng0, nano dimensions, jagex zometica, ctrm, all pretty decent small cap stocks, speculative right because they may end up not panning out, but there's a lot of good research. That's been done on all these companies.

That's me points the direction that these things can do. You know these stocks can do good things. Excellent right went from a nine dollars up to 66 bucks and look at the time frame. This is specifically important right.

We're gon na get into this more as we continue through the video, but i ran from nine dollars in december. All the way up to 66 in the beginning of february has been doing nothing but bleeding since right. Let's look at agtc very, very similar story. It was a later time frame right.

It did more consolidation during that december time frame, but january up until february, about the same time frame had its massive massive run has pulled back right b, ngo, very similar story. Look at this december all the way up until about mid-february has bled ever since. It's not by coincidence that you're seeing this trend right, look at nano dimensions. Nano dimensions had a little bit of a longer prolonged growth.

It started about november, but the majority of its hard growth, i would say, happened between december all the way up until you know february, beginning of february mid-february and has been doing nothing but selling off since another good company, jag x, very, very similar story right had A nasty run mid december all the way up until i'd say the majority of the growth was you know, ah january or so, but it did have a nice little push about mid february as well and has been doing nothing but bleeding ever since zome very similar Story had a majority of its growth from december until about mid february. Look at this same story has been doing nothing but bleeding ever since ctrm same freaking story. All these small cap stocks have been following the exact same trend of they ran from december until february, and they all pulled off. They all freaking sold off ever since then.

But it's confusing to some people, and i understand it because the stock market is at an all-time high right. You've got the spy which is sitting at just under 420 bucks right now. You've got the nasdaq, although i think it's a little bit uncertain right. I don't think it's it's not quite ready to rip, yet maybe it will maybe it won't.

I could be wrong, but also near all-time highs. Yet these small cap companies are all suffering, so i kind of want to pull into some different research and some stuff that i've read that i think, is important to talk about first things. First, what's the difference between a small cap stock and a large cap stock? Small cap stocks are typically, it's called small capitalization small market capitalization. This refers to the amount of liquidity that is put into the stock.

Typically small cap stocks are more volatile, which makes them more risky, but it has greater payouts they're. Typically, speculative companies right they're, not tried and true they're, not blue chip stocks, blue chip stocks, meaning stocks that are tried and true they're, not typically growth stocks that just give you that nice value uh growth year over year over year, you're 10 you're 15 right. Small cap stocks have that chance of really really doing something nasty. If you pick the right company right large cap stocks, are your blue chips? They're, your apples, they're your teslas they're, your microsoft they're, the stocks that have already kind of proven themselves and aren't going to have that same explosive growth, but there's more security and less risk involved with those companies right now.

I've got something pulled up right here. I want to talk about the large cap versus small cap stocks and how they compare. Overall, i think it's important to talk about um the fact that large cap stocks have that tried and true steady growth, because they are good companies right, small cap stocks to find the ones that are going to give you that explosive growth. You got to pick the right speculative place and i think this is an interesting thing to show you right now.

This is comparing some different capitalizations in the market. You've got a large cap, you've got the 5000 small cap mid cap and micros. Micros are very, very, very small companies, and this shows you the year over year over year over year, growth and how they'll compare right, and you can see that on top above everything else, is the large cap stocks now keep in mind. This is taking a lot of different stocks in the equation right.

It's not it's not taking into consideration that, oh, you might have a small cap stock to run up five thousand ten thousand percent in one two three years or whatever. It is right. It's gon na average everything out an average doubt over time if you're gon na take all not all of them, but just based on wilshire right. If you took the majority of large cap stocks and the majority of the small cap stocks, the large caps overall are going to have that more steady growth right and that's because they're less speculative.

So it's important to realize that, just because you're in a small cap stock doesn't mean you're going to see that explosive, volatile, stupid nasty growth right, you got to do your research and pick the right ones, because that's why they're speculative! But nonetheless, i want to talk about why the market is up at all-time highs. Yet you've got these small caps that are not performing very well right now and you've got the spy right. So it's important to realize what makes up the spy. What makes up the nasdaq - and this is some of your best blue chip stocks right in the spy you've - got apple, microsoft, amazon, facebook, alphabet, tesla, berkshire, hathaway, jpmorgan chase johnson johnson.

These are picture perfect, blue chip stocks right there i wouldn't say guaranteed to give you a nice growth, but they're tried and true companies, there's not a lot of risk involved with investing in them, but that's going to give the market as continuous growth. So if these stocks are performing well, it gives the idea and the picture that the entire market is doing well, but that's not always necessarily the case right. You can see the same thing with the nasdaq. So if you look at the nasdaq holdings, you've got activision blizzard adobe.

This is a little more speculative, but it's a very tried and true company. So pharmaceuticals are typically more speculative than other blue chip stocks, but you can see that they're very successful. Their latest price is 170. They have some really nice.

Consistent growth align technology, alphabet, amazon, right, you're, going to recognize a lot of these names, but that makes up the nasdaq right, so the nasdaq also very, very uh, heavily blue chip stock oriented right! That's why it's going to have its consistent nice, decent growth. So, just because the entire market appears to be ripping doesn't mean that small cap stocks are going to do the exact same because small cap stocks don't make up the spy, they don't make up the nasdaq they they are kind of a separate entity and they do Their own thing now this brings me to the next thing that i want to talk about, which is why small cap stocks have been performing the way that they have. So if you look back, you know there's two different things that i think have been playing to the equation and i think you're going to see small caps start to do things again in the future, and i think that the reversal is starting to come pretty soon. Here i i'll tell you a couple reasons why at the end, but let's look back right.

So all of these small cap stocks had one thing and similar it was that they started running at the same time and they all started just that they stopped running at about the same time now. Why is this two different factors, in my opinion, number one. You have new money that came into the stock market. It's no secret! It's no surprise that we had more liquidity that came to the stock market in in that six month, period of time that we have for years and years and years before that, i think i saw that the amount of liquidity that's come into the stock market.

In that six-month period of time was more than we saw in like five to ten years previously in the market, so new money in the market is going to push different stocks and a lot of this new money is coming from younger retail investors. People between the age of 18 and 30., admittedly i'm very transparent i'd like to tell you guys how it is, i'm a pretty new investor right. I haven't seen everything that's gone on the market. All that i can tell you is from my experience and the research and the reading that i've done right and from what i've seen a lot of the new people getting into the market.

Like myself came in at this time, when people didn't have anything better to do than research, the market look in the stocks, find ways to make passive income right and they all got at the same time, and that was about that november to december time frame right. So they could have got back in you know way in march, but that wasn't the case. You would have seen that small cap stocks back in you know march would have would have had some nice rips, but they didn't - and that brings me to my point, which is that there was a lot of new money that came into these sort of stocks. In this time frame, the second thing that i want to talk about is institutional money.

Now this makes up the vast majority of price action that you see in the stock market. I don't like using the word, manipulation unless i absolutely have to, and i don't think that's the way that you should describe this, but big money institutions, hedge funds, where they put their long dollars long dollars, meaning the stocks that they're buying they're, not shorting, right where They put their money, is we're gon na see the most explosive growth? And i genuinely genuinely believe - and you can do this yourself - you can look at the institutional investors and companies when they buy. You can see that there's a lot of institutional investors that move cash into these small cap stocks in this time frame right, your your your bio nano genomics, your nano dimensions, your jag x, your zometica, your ctrm, agtc x1. All of these companies right had a lot of big money pushed into them and at the time, the the big cap stocks, the macro stocks right.

The blue chips were not having as nasty of moves and that's because there was just a shift in liquidity in the market. This brings me to the next thing that i kind of want to talk about, and that is the cycle of liquidity that gets pushed around in the stock market right, so the market generally is going to follow an upward trend. It's for the most part going to be bullish, you're going to have bearish times right, maybe last a month, maybe last six months, maybe last a year, but overall the market's going to go up in the process of a bull market. Not all the same stocks are going to run, money will circulate you'll go through a cycle between big cap stocks.

Small cap stops big cap stocks, small cap stocks, right it's going to go back and forth back and forth back and forth, and what we saw happen here over the last couple of months is a transition of liquidity from the big boys, the institutional dollars that shifted A lot of money away from the small cap stocks into your stocks, like apple like tesla, like all of your typical blue chip stocks, i mean, let's look at apple, really quick right apple has had the same continuous growth for a pretty decent long period of time, And you can see that, even though the small cap stocks have been suffering apple's actually doing very well right now, let's look at tesla tesla's a little bit of a different blue chip stock because it is a little more volatile compared to your other large cap stocks. Right but overall right it's held on to all of its gains and is at almost all-time highs. If you throw out this, this asterix right here would hit a thousand dollars in the pre-market or whatever i mean it's all-time high, it's 876 and just recently it hit 7.85. So it's near all-time highs right.

Another example: let's look at jp morgan, right, jp, morgan, jp morgan at 153, bucks right now right, very, very, very strong price action. If you look at how much money moved into this, it's new money right, let's look at february beginning of february end of january - is when this money started pumping back into jpmorgan. That's not by coincidence right you're. Seeing that happen, that's a trend.

Trends are not by mistake: they're not coincidence, it's it's a studyable fact, and that is something that you're seeing happen right here right. So one of the two reasons why i think small cap stocks have been getting beat down so bad because i see people say you know this. This youtuber screwed me on ctrm this youtuber screwed me on and ozil medica. This youtuber screwed me on agtc right.

It's a shift in liquidity and if you play the long term game with those speculative stocks, the ones you've done a lot of homework on the ones that you think are going to do good things. You trust your research. You trust other people's research right in the long term, they're going to do what you want to do right in the short term. You're gon na have these cycles.

So if you're a swing trader during these times, there's there's two different ways. You can play it right in the short term. If you're a swing trader, you you just got ta play a little bit less uh aggressive right play. These blue chip stocks play the blue chip stocks and make a little less of a gain right.

Otherwise, you're just gon na be bag. Holes, you're gon na be chasing stocks. You're gon na be hoping these small caps go up. Looking for those volatile, crazy, stupid moves and they're, not always gon na, be there right.

So when you're in these cycles, where you're not getting confirmation from your small cap stocks, like x1 agtc, bionanogenomics nanodimensions right, there's, not a lot of opportunities here for long-term continuous swing trading right just play something a little more conservative. That's the way that that you can play this and there's nothing wrong with that right, because these will eventually get moving again. The good small cap stocks when big money starts pumping into them again. They're gon na reach their new all-time highs.

They're gon na continue to grow they're gon na continue to do good things right. If you're, a long-term investor right, not a swing trader swing. Traders will focus on a couple days to a couple weeks, maybe even a couple months right if you're a long-term investor. You love seeing this because if you've done your research on a small cap company and you think that the speculation isn't warranted, you think they're going to do good things down the road.

You should be rubbing your hands like this and be going lido because you're buying it on a freaking discount. You don't want to buy stocks. This is kind of a backwards psychology that i think only really investors have and that's that people want to buy when it's ripping up and people want to sell when it's ripping down, but that's backwards right. You want to buy stocks when they're ripping down, because that means you're buying them.

You want to buy fear and you want to sell greed. That's the way that the stock market, the most opportunity, is going to present yourself, you're, going to be the most profitable over and over and over and over and over over time right. So small cap stocks, if you're a long-term investor being this cheap, should make. You excited, they should really really make you excited, because i think nano dimensions is a great company, bionitergenomics great company, agtc great company, x1 uh freakin, jagx, zometica ctrm.

I think they're, all pretty good companies that have proven uh. You know prove it speculative right, but proven demand in the marketplace where they can really dominate their specific uh. You know product and that's something i think is important to talk about. So i've seen a lot of questions about small cap stocks liquidity and i think those are two things that are important to address.

So what does this mean moving forward right? It means that you're likely not going to see as much liquidity get pumped into the market by new retail investors right. I think over time you slowly saturate that market right we've slowly started to saturate the younger retail investors, and i think you're going to have more continuously start to come and come and come over time right. But that's not gon na be that substantial, absurd, volatile parabolic growth that we saw between november and february right - that was very, very unnatural. That's not something you're gon na see over a long period of time.

It's not sustainable right, there's, nothing wrong with that. It just means that you're likely not going to see moves where you've got a million different penny stocks in the market that are having moves from 16 cents up to two bucks. You know it's gon na, be something that happens slower over time, but they will come back right. Secondly, you want to watch for institutional investors that are putting money into stocks.

How can you do that right? It's as simple as this. You want to search up something like ctrm institutional uh ownership, and you can come over here to fintel it's going to tell you when the most recent buyers, institutional buyers have put money into stocks like this. So, for example, uh you've got ctrm most recent buyers. You want to pay attention to the biggest size and compared to the overall free flow that is on a stock.

So, for example, ctrm's free float is about 695 million shares, so a substantial buyer to me is gon na, be anything between, like maybe three percent to ten percent, and if they've got that many shares outstanding you're. Looking for at least a couple million shares to be justified right, 4.9 million and 4.0 million - that's pretty substantial. I consider that you know enough to pay attention to right, so you want to watch when big money starts to put their money back into small cap stocks. That to me, is going to indicate that these are starting to move in the right direction.

So those are the two things i think you should watch for in terms of the small cap stocks, why they've been pulling back like they are right now and uh. Give you a little bit of you know. I should say you know assurance right assurance that that's not the end of the world, if you're a long-term investor in small cap stocks, you've done in research, you've done your dd. You just got to be patient because patience pays.

I'm telling you right now. That's what i've got for the video, so if you enjoyed it, please drop a like consider, subscribing blah blah blah the whole spirit that every youtuber says. That's what i've got for you guys. So thanks for watching my friends, my family, my fellow gorilla gang catch y'all, the next one, much love and peace,.