Russell/SPX Divergence Indicating a Market Cycle TopThe stock market continues to make new highs and is finishing the final touches in this topping process. The problem is the Russell is failing to make new highs. We can see before every stock market crash was accompanied with the SPX/NDX/DJI making new highs while the Russell makes a lower high. This occurred during 2008, 2022, and it could be happening right as we speak. The Russell failing to make new highs suggest that the topping process is underway and we will be getting a powerful stock market crash.
IWM trade ideas
$IWM Trading range for the day. 9.6.24Absolutely HUGE range here in IWM. 207-217 is the implied move on the day and a dollar wider on Mondays contract.
And look at that 50DMA/1hr 200MA block. My opinion is that we get pushed into that gap underneath - that island bottom gap that we made just shortly after that big drop last month.
Wild first week. I don’t know how I’m going to play it until after the market opens but let’s gooooo…
IWMTheory is we have another leg higher to IWM here before we submit to the C wave on the very HTF cycle wave 4. I suspect this will be an expanding flat and wave B will hit close to $260-$300 before wave C runs all the wave back down to $110 finishing the 4th. Then we start the HTF wave 5 to $450-$600 per share
IWM Short, then LongI want to short AMEX:IWM on a retest of 216.62 (orange circle) after it fills the hidden bull gap from 213.60 - 215. My final take profit will be at about 209 - 209.50 area, which is the equilibrium of the current uptrend and a previous swing high spot.
I will be looking for longs at this general 209 area back up to 216.62.
The current uptrend is very much overextended in my opinion, with the 8/1 signal bar showing wide scale distribution.
Opening (IRA): IWM August 30th 193 Monied Covered Call... for a 191.21 debit.
Comments: I'm not quite ready to move out to the September monthly due to its duration, so doing a little something different here to attempt to milk a smidge more out of August. After having taken off my longer-dated position in profit, re-upping in 45 DTE with the short call at about the exact same delta it was at previously (around the -88).
This doesn't result in really awesome ROC metrics, but I have already grabbed the June divvy and realized gains in the August cycle, so am just looking for a little more somethin' somethin' without taking on a ton of additional risk before moving out to Sept. As usual, I'll look to take profit at 50% max; roll out for duration on side test.
Metrics:
Buying Power Effect/Break Even: 191.21
Max Profit: 1.79
ROC at Max: .936%
50% Max: .90
ROC at 50% Max: .468%
Weekly resistance hitIWM had an impressive week as the bulls took charge again from the bottom of a trading channel.
Now IWM is back near the top of the weekly channel, facing resistance following a weekly false break.
If you are looking for potential bearish entries, this is an interesting zone to watch
IWM: Prepare to ShortFrom this chart, I have marked 8th Nov 2021 as the peak and end of the bull market for Russell 2000. This is despite the fact that S&P500 is still making new highs, a result of financial engineering.
IWM is now more representative of the actual health of the US economy. From this chart, I've marked the wave 1 impulse wave down, a triple combination (3x A-B-C = WXY) as wave 2, and the most recent sell off as minor wave 1. We are now in a minor wave 2 up. Personally, I will use the next Fibonacci retracement level (0.382) as my short entry point.
$IWM Trading Range for Today, August 7th 2024AMEX:IWM Trading Range for Today, August 7th 2024
Today’s implied move is between 200 and 209, and tomorrow it’s 198-210
A lot of really important levels to know if today’s trading range. We have the 1D 200MA, the 35EMA on the weekly timeframe, the 4hr 200MA and the 50Day MA all running through today’s range.
We also have a bear gap at the top of the implied move on the da, up near the 50DMA
Hopefully you’ve been following along on the videos and you know exactly what these levels are. I just didn’t have time to make a video for today but hopefully this is enough.
GL y’all.
Russell 2000 fractal points to 40-60% dropRussell 2000 currently creating fractal.
Points to possible 40-60% downside.
This fractal creates:
- A top
- A bear flag
- A failed break to the upside
- A large break down after the failed break up
This fractal occurred in 2008 and 2020.
Both instances of recessionary bear markets.
This could play out similarly if we get a recession.
Price target is around 95 -100.
More Downside for IWM or Is This a Rescue Operation?Let's kick off Tuesday morning by breaking down IWM:
First and foremost, on a daily chart, it appears to be in a freefall and this slight recovery is just a bounce along the ride down, complimented by the rising wedge pattern on a 1H chart.
I'd like to sit back and say, "well the markets recovering, so IWM should too". However, experience has taught me to trust the chart and not my heart. Keep in mind, the bottom also appears to be near so be cautious.
Other thoughts. We did see this ETF take a rip roar towards the upside about 3-4 weeks ago while the rest of the market trailed, so that's no real indication of what could happen in the upcoming days.
Conclusion: I'd be looking to day trade this, leaning towards a short-term slide towards the gutter in the region of 197. The sticky note region at the top, around 206.75 - 211.12 would indicate overhead resistance and a good place to lay groundwork.
Anyway, I'll be paper trading this out of curiosity. Market is volatile this week.
Trade accordingly.
Crypto and Alts: time to be bullish . . IWM vs SPX will confirm?more confirmation of liquidity cycles repeating.. chart of IWM vs SPX ...
U can see that a trendline usually starts right when BTC is leaving its lows
And breaks during halving year with a RETEST before taking off
ALL OF THIS HAS JUST HAPPENED.
This comes at the same time with several bullish catalyst
- increased liquidity from US FED
- slow down in large cap stocks after giant rally
- upcoming Fed Cuts
the cuts themselves aren't bullish but as people expect this to happen they may front run and begin to position early (aka over the next 6 months)
this creates a risk on environment
This trend has happened in all the prior halving years and BTC especially Altcoins has positive movement into the end of the year.
worth also noting that there is a serious risk off period after this brief bullish .. will keep an eye out if we see euphoria type action into the end of the year.
IWM vs SPX: Bullish Breakout= Risk On..BTC & Crypto Rally Q3+Q4?more confirmation of liquidity cycles repeating.. chart of IWM vs SPX ...
U can see that a trendline usually starts right when BTC is leaving its lows
And breaks during halving year with a RETEST before taking off
ALL OF THIS HAS JUST HAPPENED.
This comes at the same time with several bullish catalyst
- increased liquidity from US FED
- slow down in large cap stocks after giant rally
- upcoming Fed Cuts
the cuts themselves aren't bullish but as people expect this to happen they may front run and begin to position early (aka over the next 6 months)
this creates a risk on environment
This trend has happened in all the prior halving years and BTC especially Altcoins has positive movement into the end of the year.
worth also noting that there is a serious risk off period after this brief bullish .. will keep an eye out if we see euphoria type action into the end of the year.
$IWM - Delayed shooting start effect!AMEX:IWM Remember the July 21 post where I mentioned we might check back to the $210 area, and then a week later, I thought the shooting star was invalidated? Well, guess what? It even dropped below $210. It was just delayed by a week. 😂
$200 or below could be a good reload area.
Was that it for $IWM? Do we correct before the real run?While I do think that IWM is the place to be over QQQ , I think this run has gotten a little ahead of itself.
I noticed something interesting today on the chart, if you look at it on the 6hr or 4hr, you'll noticed we tried to break above resistance on the 9am candle, and rejected hard back below it.
This leads me to believe that the next move from here is actually down, not up.
If we zoom out, the chart looks extremely similar to how it did before the covid crash. We formed a high, went down and v bottomed up into what looked like a breakout (Feb 2020), but instead formed a double top and then rolled over hard.
Now we've pretty much made the same move, we formed a high in 2021, corrected, v bottomed in Oct 2023 and now we're at the exact level where a double top could take place from the high that was formed in Jan 2022 before price broke down.
So will we have another covid style crash that brings price back to $150 or lower? TBD, but I have that feeling...
$IWM Daily Trading Range for Friday August 2ndIWM took a beatdown yesterday and again today in premarket. It is just a little after 8:30 AM this morning, and IWM is down about 3.5%. It is now underneath the two gaps that we saw above the previous long-time resistance at 211. It will be interesting to see if that 211 level remains as resistance, or if we can get back above it and try again to fill those gaps from underneath.