Heavy resistance at 220 (take profits) w/correction target
Russell 2000 is coming into heavy resistance at 220. There is the 3.618 from the great financial crisis and the 1.618 from the Sep 2018 to March 2020 correction.
In this chart, which is set to LOG scale, we have broken above the 20-year trend line for IWM. Given the heavy resistance at 220 (5% up from here as of today), the major trend line, and the fact that IWM has had a huge run at the end of 2020, I believe we will see a rotation back to big tech (QQQ) and/or a market correction.
How to trade it: look to take profits now/soon on small caps. Be aware of resistance at 220. If it breaks above 220, retests and resume, very bullish. If we see it rejected at 220, look for a correction to the 165 region (20% down) and finding support at the downward sloping trend line from the 2018 high and the January 2020 high.
In this chart, which is set to LOG scale, we have broken above the 20-year trend line for IWM. Given the heavy resistance at 220 (5% up from here as of today), the major trend line, and the fact that IWM has had a huge run at the end of 2020, I believe we will see a rotation back to big tech (QQQ) and/or a market correction.
How to trade it: look to take profits now/soon on small caps. Be aware of resistance at 220. If it breaks above 220, retests and resume, very bullish. If we see it rejected at 220, look for a correction to the 165 region (20% down) and finding support at the downward sloping trend line from the 2018 high and the January 2020 high.
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