Testing resistance againIWM with nice run to the top of a weekly channel and the 61.8 Fibonacci level.
We also have a weekly structure resistance.
Will the Bulls be able to overcome this weekly resistance zone?
IWM trade ideas
IWM Rally Around the Corner?Bullish divergence is spotted on the IWM/QQQ chart, IWM is being dragged down because of Fed hawkish comments and KRE underperformance. This is a weekly chart so we need time for this to play out, I remain bullish on IWM for the remainder of the year, even just 1% of inflows from QQQ into IWM could make it go up 10%.
7/10/24 - $iwm - setup to repeat '21s RIP??? o- look at SPY/SPXEW to get a sense of the weighted AMEX:SPY (tech-heavy led by 10 companies) vs. the equal weight SPY ( INDEX:SPXEW ) to get a sense for how rarely we reach such extremes. these are MONTHLY bars i'm showing
- when the general start to fade THIS DOESN'T MEAN THE MARKET TANKS. it could mean a 5-10% pullback. but what happened last time this occurred in '21 after a big rally of quality out of the covid lows (tech... remember? then everything else) was AMEX:IWM (the yellow line)... the "everything else market" got massively bid.
- history often rhymes and doesn't repeat. RATES WERE GOING TO ZERO HERE. And now they're not. that's a MASSIVE wrinkle to be aware of. however, if the expectation is lower rates, at least in the 6-12 month context, small cap that is getting decimated because of a. funding/ cost of capital b. lack of bid and c. more economically sensitive... will get bid, sooner
- in order to not over extend myself and buy some time in developing this thesis, i've gone WAY out and bought some ATM (at the money) AMEX:IWM 200C for Dec 18, 2026. 28% implied volatility is too low given what we've seen in the past and given how much money could theoretically rotate from these generals into small caps.
- still developing this view, but have made these C's 2% of my book which means the gross value is about a 10% position. i'm willing to neck out here even into extended territory here (on general risk mkts) bc 1. the IV on these options remains sub 30% 2. the expiry is SO FAR out and 3. i remain very cashy - so this is a way for me to get more gross exposure without necessarily deploying a lot of cash.
LMK what you think. will be developing this thinking over the coming months.
V
Understanding Technical Indicators - Avoid FaultsI received a question from a member today related to Divergence on RSI or Stochastics.
I've been lucky to actually sit down with the creator of Stochastics, George C. Lane, to discuss his indicator and how he used it to trade.
I've also been luck to be able to attend multiple industry conferences over the past 20+ years where I've been able to watch and listen to dozens of the best technicians and analysts explain their techniques.
Boy, those were the days - right?
This video is going to help you understand most technical indicators are designed based on a RANGE of bars (usually 14 or so). This means they are measuring price trend/direction/strength/other over the past 14 bars - not longer.
And because of that you need to understand any trend lasting more than 14+ bars could result in FAILURE of the technical indicator.
Watch this video. I hope it helps.
Get some.
$IWM could be on the verge of breaking out!AMEX:IWM could be on the verge of breaking out of the broadening wedge, as evidenced by the rising MACD, RSI, and momentum. The price could head to the upper trendline of the triangle. 👀🚀
The Russell 2000 is heading downtown to chinatown
The IWM is currently in a bear flag that has been forming for the past 2 weeks now, withing a bigger head and shoulders pattern that topped out on May 15th @ 209.77. I expect the bear flag to break sometime next week if not friday this week. First target is the neckline of the H&S at $195. If this breaks that will activate the H & S and target for this, depending on when the pattern is activated, would be around $180-$170 area. AMEX:IWM
Same look as Sep 2020?The crossing of the 55 and 600 Day MA means a bullish change in small cap stocks.
If large caps have strong earnings moving forward, I think small cap will follow and break this capitulation.
From 175-190$ I will be buying for long term.
Wen small caps? - IWM Weekly ChartIWM/RTY (AKA the Russell 2000 Index) has been really struggling to keep up with it's peer group of major market indices. However, with a tightening range and a reason soon (lowering rates) to get a push higher in growth, I could see this pushing back up and making new highs. When will we see new all time highs here? Not sure but it has to happen at some point right?..... right?
Weekly Price Zones and Channels to monitorIWM, unlike the rest of the indices, is stuck in a consolidation range.
It looks like it wants to break higher, but every time it reaches 210$ it gets blocked.
If the S&P and the Nasdaq (All Time Highs) will turn lower, IWM may be the weakest link to target for bearish positions.
Pay attention
$IWM - Looking good so farAMEX:IWM could be heading to the upper trendline of the triangle. If Friday PCE comes in light we could see small caps rally. 👀
How I improved my Situational Awareness - Market Update 6/23/202This weekend I pulled up the sleeves and did a lot of post-trade analysis to realize what my biggest weakness was in trading: situational awareness. I developed a market timing model, backtested it on my own trades and on the market and the results were shocking to me. If I had only been trading in good periods, I would have already been profitable. This is despite the fact that I still make a TON of mistakes in execution and risk management. After all the saying is true - anyone can make money in a good market. Now that I know how to identify a good market for my strategy, I developed rules around it in terms of risk management. This will not only help me to reach profitability, but probably also have more peace of mind as I won't be swimming against the currents.
Markets are still not the best for longer term swing trading, so I will focus on shorter trends and potentially risk reversal trades, of which my strategy is still to be developed.
IWM Q2 2024IWM ETF Q2 2024 view with RSI and 200, 100, 50, 20 VWMA indicators.
IWM
SMCI
MSTR
FIX
CVNA
ANF
ELF
CHRD
Small Caps won't turn around until Gold doesGold and small caps are correlated at .5 - gold double topped and is going lower, I anticipate this will hit the red, jog a little, and if the FED doesn't cut rates, we will go down a run every FOMC meeting until the FED cuts rates or they go down because BOJ is selling our treasuries to shore up their currency that's always competing with China's Yuan (whose trying to shore up their real estate bubble popping which is the largest asset in the world).
Small Caps Looking IllVery disappointing to see small caps give up all their gains from the CPI report on July 12. I also don't think the damage is over and we'll quickly see capitulation down to the lower trend line. Possible bounce from there depending on how the capitulation takes shape.
Russel 2000 IWM is about to tank. Followed by NVDALooks like IWM about to go off a cliff. The shorting has begun. AMEX:SPY will be last; specifically NASDAQ:NVDA and NASDAQ:SMCI and all that Ai trash that isn't earning any real money. They will be last; but when they go it'll take everything else down another 50%. And they'll finish down 95%
Chart shows monthly slow-stochastic about to lose embedded. Volume is in the toilet and declining since LAST YEAR. Just like NVDA that garbage bag is rallying to new highs on 1/3rd average volume. I've never seen such drunken stupidity. Maybe the only thing Ai is being used in is buying stocks because apparently it only learned how to hit the buy button.
Incoming disaster soon. IWM about to go off cliff.
Calls RussellLooks like a bullish flag, just bought some calls as shown. I'm expecting a breakout of the 210 resistance.
IWM watchwith the announcement of rate cuts .25 bps in 24, it's a good time to start watching price action of Rusell to start a position. still ping pong action in this megaphone pattern. the common misconception is that rate cuts are good for equities, when i believe it is not. thesis is that when stock market starts to cool off and hit major supports. up to interpreting price action each day/week to know what will happen after. assess strength of each support through volume.
we either breakout this megaphone and go on a run, or we keep ping-ponging, so i feel no rush entering a position at the moment.
Market Update 6/9/2024Usual stuff, watch my videos at 1.5x speed
NASDAQ:INOD
NASDAQ:NVAX
NYSE:TDW
NYSE:OSCR
NYSE:RDW
AMEX:COHN
NYSE:MEC
NASDAQ:SEZL
NASDAQ:MGNI
Next Week's IWM, 21 Day Pivot Standard Deviation RangeLooks like the medium term bias is to the downside for small caps, as we see the weekly pivot (red solid line) fall below the monthly pivot (dark solid line) with AMEX:IWM closing below both.
Both deviation boxes represent two standard deviations above and below the a moving monthly pivot. We may see demand in the lower deviation range if we fall to start off the week.
A rally to start of the week will likely be met with resistance from our pivot points and a fresh downward move from the 21 day moving average.
Investors that want to take advantage of this medium term bias could short volatility in the short term (June/July) for IWM using AMEX:TZA but bet bigger on long volatility in the longer term (September/January2025).
Take any short term gains to the upside and hold onto your short thesis heading into the second half of the year, into 2025.
My idea on where we are going --> Higher!Big picture you see an inverted H&S, then zoom in on the right shoulder you can see a smaller inverted H&S forming. If we get a cooling in the labor market and lower inflation readouts then I expect small caps to explode to the upside.
IWM about to freakin dieThese two patterns look very similar to me. I think IWM is about to take an absolute giga dump in the bed like Depp's ex wife. watch out.
