The small caps, once again, are front and center of my screens today. For a while now, bulls have been dismissing the weakness here as simply not being the real market, mostly pointing to the strength in the Dow, S&P, utilities, energy, and staples. They may have a point, in the sense that the market has yet to break lower with ferocity as a whole, but the longer the small cap stocks in the Russell 2000 remain weak the longer I entertain the probability of a sudden washout lower.
On the hourly chart for the small cap ETF, note the armed checkpoint we price at currently. That lower support trendline, in light blue, had better hold for this aloof tape to stay afloat. Overall, this is a descending triangle pattern which has a slight bearish bias, in a correction, especially.
I suspect a move under $108 on the IWM can see things getting quite flashy and crashy in a hurry.
Bulls want to see a move back over $111.
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They’re trying to confirm the descending triangle as we speak.
High stakes
It is going to be very interesting. It is almost as if it’s too obvious. Maybe a bull trap? I love this game.
* bear trap
Gun to the head I’d say we flush today. I’m looking for 30+ points today on the RUT. Loaded with TNA and IWM puts.
That seems to be the sentiment, hat’s why I am cautious. I’ve seen way to many false descending triangles where price rebounds off the support. If we do flush, I think we still have time to chop through the triangle till it really gets ugly.
Chess, I’m at work, with things to do, and I can’t stop looking at this IWM. What a nail biter! I have no idea how this turns out, but I’ve counted myself desperately saying “please Lord Jesus” out loud, at least six times this morning…
Chess,
How are you playing it. I am think TNA put spread for june30th. May be 60 /55 spread
Could work