I shorted IWM @ 225.25Daily stock rolling over daily. candle rallied up shorts dropped it. Target 207-209
IWM trade ideas
IWM - Penny to PennyLook how these algos pulled the IWM in a very specific range. the skew is saying the IWM will rise again.
iShares Russell 2000 ETF (IWM)IWM breaks out of short-term ascending triangle late last week into early this week. Now working its way towards completing a two-and-a-half-year cup pattern. The pivot is currently the left side apex of the developing cup. Should a handle develop at some time soon, the pivot will shift from that left side peak to the apex of the right side of the cup. A take and hold of pivot would put a conservative target at $276. I am long this ETF.
IWM Explosive!AMEX:IWM has to be one of the most explosive look stock ever! I'm talking about a small cap "index" being this parabolic to the upside. Seems like we are going to have quite the bull market in 2025 maybe.
Small 'n Furious. Early 2020's Signaling A Big Midcap Run AheadThe Russell 2000 trailed the S&P 500 significantly in 2023, gaining about 17% compared to a gain of about 24% for the large cap index. That underperformance has spilled over into 2024. Year-to-date, the Russell 2000 is about 2% compared to a 7% gain in the S&P 500.
By the way, that valuation measures make the small cap Russell 2000 index much more compelling when compared to the S&P 500.
Small caps relative to the S&P 500 on a price-to-book basis is back to where it was in 1999, which was the absolute low and was a launch point of 12 years of outperformance for small caps.
As of January 31, 2024 small caps price-to-book ratio is 2.01, as it described on FTSE Russell 2000 Index Factsheet.
Like a sensationally increased shares of Supermicro NASDAQ:SMCI or e.l.f. Beauty Inc NYSE:ELF , I believe many other small cap stocks can be the best ideas for 2024, in part because of that participation in the ongoing stock market rally is improving and is no longer concentrated in just ultra-mega-cap tech stocks, like it was in 2023.
If so-called breadth improves in the stock market, then small cap stocks will catch a bid.
There are three factors will help to boost small-cap stocks in 2024.
First, fund flows into the stock market are necessary for small cap stocks to outperform. If retail funds aren't flowing into the stock market, then funds likely aren't flowing into small cap stocks.
That have changed already in late 2023 as investors start to warm up the stock market.
To be clear, let's take a look at lower technical graph, so-called "AUM", or AMEX:IWM assets under management chart, that is one of the most important ETFs metrics. While it's been correlated pretty well with IWM price action over the past two years, last December has changed the rule, as managed assets smartly jumped to almost historical highs.
Second, small cap stocks are highly levered and tend to have a higher cost of capital, so a decline or no more hikes in interest rates should benefit small cap stocks much more than large cap stocks.
To be clear, let's compare two graphs: for actual U.S. Interest Rate and Expected on Dec, 2024 Interest Rate.
Finally, an expansion in economic growth could be a "huge tailwind" for small cap stocks as they are highly exposed to the domestic economy.
An overlooked area of the stock market is set to soar in 2024 after significantly underperforming the S&P 500 last year.
In technical terms, AMEX:IWM graph is near to break its 52- and 104-weeks highs, to deliver the price 50 percent higher after a breakthrough, like it did it before, on the hottest ever edge of 2020 and 2021.
Did a bearish D leg just complete? Today I have decided that I, like everyone else, will be an IWM expert!
Everyone is talking about how impressive the spike was. Not a lot of people talking about the ABC structure before it and the fact when we have a spike out of there - that can be trouble.
Here's a little bit of trivia for anyone who wasn't paying attention to it in 2021. During 2021 everything ripped - except this. It traded flat in a range. Ironic, given the meme mania was mainly in this index.
Then it did this;
And that was the end of the 2021 bull market.
This spike also brings us to the zone of a typical bull trap. Something I've been waiting months for.
Very interested in fading this RUT spike.
And if the harmonic reversal failed - would be incredibly bullish.
Opened (IRA): IWM August 16th 191 Monied Covered Call... for a 187.46 debit.
Comments: (Late Post). Sold the -75 call against a one lot to emulate the delta metrics of a 25 delta short put, but with built-in short call defense.
Metrics:
Buying Power Effect/Break Even: 187.46.
Max Profit: 3.54 ($354)
ROC at Max: 1.89%
ROC at 50% Max: .94%
Will generally look to take profit at 50% max on the entire setup (stock + short call) as a unit, but won't hesitate to roll out the short call if in profit to keep my break even at or near where the underlying is currently trading.
Golden Fibonacci Sequence Target (Bullish)Impulse wave up, with a 38.2 percent retracement, which usually causes a 161.8 percent extension off the bullish reversal's bounce. Long Posiition tool set for Trade
I am short IWM 208 added 206Look stoch heading down both short entries. Look vol more selling buying lower highs and under 50 and 100 MA Target 192.25 200 day ma
$IWM Closes right at known resistanceSo 211 - which is where we closed today - is right at a known resistance, and before that a previous support level!!
That's it... that's the post.
let's see what happens
SMALL CAPS READY TO SOARIn this video I go over a Russell setup that I want to get login as soon as I see a pullback onto support or somewhere meaningful so I can set up a good risk to reward ratio for a long. The small caps have been getting beaten down for a long time and getting cheap while the mega caps and tech stocks have been getting expensive to a point where nobody wants to buy them anymore. This morning, I closed out all my mega cap tech and NASDAQ longs for a good profit and I'm sitting flat waiting for my next set up.
iwm/spx ratiothis is a ratio performance of iwm vs spx. This chart tells you a performance of iwm vs spx at any given time. As you can tell from this ratio; spx has outgained iwm for 10 years starting in 2014. I believe this ratioed has bottom and it hasn't been this low since 2000. If you bought IWM over SPX in 2000; IWM has outgained SPX for 9 years after that by 78%.
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 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. 👀
