Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Both time cycles and Fibonacci are aligned … targeting intermediate low(s) for the Russell (IWM), in June.
This post, released late on Monday, showed a potential reversal set-up for the IWM.
The next morning (yesterday), saw a sharp, brief move higher which quicky reversed into a sustained decline.
That decline continues during this session.
The weekly chart of IWM is below; marked up with a Fibonacci time sequence.
Russell 2000, IWM, Weekly
Week 34, identified with the back font, represents a 1 : 1, Fibonacci projection of the initial leg down.
Week 34, in the magenta font, is a 1 : 1.618 projection of the same initial move.
These are projections only (not advice, not a recommendation).
However, there’s a time cycle study available at this link.
Go to time stamp 8:27, for the Russell 2000. The method is different, but the projection is similar; heading lower into early Summer (mid to late June).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Russell 2000, attempts to break through resistance; reverses and then tests (Monday), just as ZeroHedge says the short squeeze is over.
There’s a lot of trying-to-make-everything-look-complicated, wording in the link above but the take-away is, the market may be finished with the recent short squeeze.
At this juncture, Russell 2000 (IWM) looks like it’s hit long-time resistance around the 211, area and reversed.
The past two trading days may have tested that reversal.
IWM, Daily Close
The support (blue line), now turned resistance has been in-effect for over a year.
The zoomed version below shows it’s clear, at this juncture, price action’s not penetrating resistance.
As with bonds in this report, we’re at the danger point.
This is where risk is least for either short or long (not advice, not a recommendation).
Naturally, with the ZeroHedge report (above) saying that shorts have been effectively covered, price action direction favors the downside.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
It’s not always what’s happening; it’s also what’s not happening.
‘The curious incident of the dog in the night-time’ … the dog did not bark and so indicated, it knew the killer.
In Steven Van Metre’s Sunday night update (time stamp 5:55), he highlighted that small caps, IWM, (Russell 2000) tracking fund is in a ‘crash pattern’.
We’re going to look at the small caps and see what’s there and what’s not.
Russell 2000 (IWM):
Weekly Chart of IWM
The up-thrust is clear … we can see that.
However, the question is, what’s not happened with this (potential) set-up?
Moving to the daily chart, it shows the up-thrust has not been tested.
There’s no rule that says it has to be.
However, price action shows a spring set-up and retrace in process (below). We also have a Fibonacci target that looks like it might work out.
Moving closer in on the daily.
A retrace to the 62% level, would (could) act as the test of the up-thrust shown on the weekly chart.
That move if it takes place, would create its own up-thrust of the resistance area (below the 62%, level).
On top of that, we may have financial media helping out by getting participants on the wrong side; if so, they’re likely to foment news stories of continued ‘recovery’ or ‘inflation’ moderating … or some such non-sense.
The Media’s Role
In fact, if we get a retrace and the press does not jump on board … I’d be wary of the set-up (not advice, not a recommendation).
Remember what a good job they did with gold … $3,000/oz, is “imminent”, right?
Gold Down, Market Up?
Is that possible?
For starters, the question is what’s called a ‘mind-trap’. A certain way of thinking that causes one to get boxed-in.
The dollar continues its rally and gold appears to still be inversely correlated. We’ll stay with that as the main indicator of GDX downside potential.
Yesterday, it was thought the up-side correction in GDX, was complete … and that may still hold true. Today’s action looks like a minor test (thus far) of that correction.
Note, at this juncture, heavy-hitter, NEM, has posted out-side-down from yesterday’s price bar … hinting that it’s ready to continue lower.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
As is typical of Fed announcements, the market tends to go one way before the speech … then, the opposite way after the speech.
As real estate (IYR) pushed higher before the speech, it got just a little too far upward for comfort. The short position was closed out for one managed account.
As time progressed, price action was clearly setting up a spring condition; seen in the 30-minute leveraged inverse fund DRV, above.
The Project Stimulus Account closed its TZA position (for profit, table to follow) and the account then positioned long DRV, at about 4.49 (not advice, not a recommendation).
The stop is tight … the low of the day @ 4.42 (not advice, not a recommendation)
We’ll see what happens next
Stay Tuned
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The past six months shows the Russell 2000 (IWM) in choppy and impulsive action; both up and down.
The last eight trading days have seen that choppy action begin to exhibit a hint of order.
It does not look like much … until you put in a trend-line .. or two:
Adding to the intrigue; channel width is at Fibonacci 8-Days.
If today’s session closes lower (no guarantees) and posts a new daily low (below 220.26), it adds weight the Russell may be in the very early stages of trending lower.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Barring any new highs in the S&P, which seems less and less likely, the market has bookended two historic extremes.
September 3rd, 1929, was the peak back then; September 2nd, 2021, is the peak now.
This site has said many times, if we’re doing our job right, whenever the big reversal comes, we’ll already be in position (not advice, not a recommendation).
So, far that has proven to be correct; having gone short via DRV and TZA during the past week.
This down move is still very young. It’s almost imperceptible and could somehow be negated.
However, with each passing day when there’s no attempt or unsuccessful attempts at new highs, downside probability continues to build.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point® 