$IWM Cup and Handle Just Formed!As we steam forward in this bull market, I think AMEX:IWM is getting ready for a big move. If we open Monday at ATH its blue sky breakout time. #IWM
IWM trade ideas
Defining Target for Risk Reward: Maybe you shouldn't?The trade plan is broken up into parts. We have an objective and consistent entry, stop, and exit plan. Here I will be talking about the exit plan and setting targets that will give you a particular risk/reward ratio. There are no absolutes when it comes to what risk/reward you should be aiming for, a lot has to do with how you handle risk and loss and your overall understanding of markets.
Defining the stop (risk) is relatively easy compared to defining the target (reward). Mostly you need a clean set of statistics on an objective method. This will give you an average distance that the swing will run in relation to your method. The reward part of the equation is a function of how far your stop is to your entry.
There is no one-size-fits-all when it comes to trading. For many, it may be best not to set a target, but instead use something simple and objective like a moving average to exit the trade. This way, you get what the market gives you while incorporating consistency and objectivity into your exit plan. Keep it simple, objective, and consistent, and learn as you go. In the video, I make something up on the spot that may give you some ideas. I use a 20ema as a profit stop only after price has made a new high. It's simple, principle-based, and it's objective.
No matter what your method, knowing where you are in the swing cycle will help in defining entry, stop, and target, and this will directly influence the risk/reward ratio.
Shane
Opening (IRA): IWM May 17th 170 Short Put... for a 1.74 credit.
Comments: Back to short puts here, targeting the <16 delta strike paying around 1% of the strike price in credit. Just gradually building a position here at intervals.
IWM 5TH WAVE DIAGONAL HAS ENDED I now can label the rally as ENDED in the IWM . Most are looking at this rally as a break out I am worried if this breaks from here .If it does based on the P/C models we would break and it would be UGLY .
IWM long 170 . add 162 can keep sl at 154 , we are back at June 2018 lets in this snoozefest of an index, maybe time to wake up when nothings in its favour ,
contra call
Cup and Handle + Channel breakoutThe Russel 2000 has been in a steady range between 162 and 200 since January 2022 – more than two years now.
The current situation presents some bullish signals. This is the 6th time it's touching the upper side of the range. Generally, more touches on one side of a channel increase the likelihood of a breakout in that direction. Additionally, a substantial cup and handle pattern has formed, and there's room for RSI to climb on the weekly chart.
Resistance: 217.33 (R1 Pivot)
Target Price: 233.16 (R2 Pivot)
Support Level: 189.28 (P Pivot)
It's essential to exercise caution though, especially if the broader market corrects, which seems likely in the mid-term. A broader market correction always impacts the Russel 2000 as well.
IWM Long Term PerspectiveIWM saw a very strong bounce with triple positive divergence.
After a very unhealthy rally in the last couple of weeks, we have seen IWM struggle to go green on the daily.
With the RSI extended like this we could tap the trend line one last time before the Fed pivots and we rally into 2024. Then Crash.
IWM is a great representative of the true economy rather then the mega caps who blur everything.
There was a very large triangle pattern that was broken on the down side, which I can definitely see moving further.
If the GREEN support line is broken, I will close out my trades.
Opening (IRA): IWM April 19th 176 Monied Covered Call... for a 171.23 debit.
Comments: Buying stock and selling the -75 call against to emulate the delta metrics of a 25 delta put. This setup gives me a slight bump in premium over selling the 25 delta put due to call IV skew, along with built-in position defense with the short call.
Laddering out over time after flattening out at the end of the year. I'll naturally look to add in shorter duration if I can get in at strikes/cost basis below what I currently have on, but will probably continue laddering out to the end of the second quarter (June) for a bit here.
Will generally look to take profit at 50% max; look to roll out the short call to reduce cost basis further should price traverse the short call strike (since extrinsic is highest in at-the-money strikes).
IWM Russell put The Russel was propelled up last week by the companies within the index. Also the pattern it is forming signals that we may see the m formation play out. Or we may confirm a new trend upward of higher lows that is where TP1 is marked if we bounce there a new trendline with 3 touches is created.
IWM INVERSE HEAD & SHOULDERS CONTINUATONHere is IWM bouncing off of the 5ema while also in the process of confirming an Daily inverse head and shoulders pattern. The inverse head and shoulders will be confirmed once price breaks 199.53 and this could give IWM a chance for continuation to $205+.
IWM BreakoutIWM brokeout on friday. Pull backs = BTFD. MACD and RSI curling. Small caps have been heating up and the run starts now. Lots of room for upside in sentiment and oscillators. RISK ON.
$IWM pump and dump?AMEX:IWM bulls need to step up if we want to get it back to $205 level and continue on upward if not we'll fall back to $196 then later eventually leading back to lows 160s. NASDAQ:NVDA earnings will factor along with CPI / OPEX ahead.
Opening (IRA): IWM March 15th 183 Monied Covered Call... for a 179.87 debit.
Comments: Doing another one of these in March with a short call strike and cost basis better than what I currently have on at the 186.
Selling the -75 delta call, buying a Johnny one lot to emulate a 25 delta short put in order to take advantage of call side IV skew.
3.13 max profit on BPE of 179.87; 1.74% ROC at max; .87% at 50% max.
Will generally look to take profit at 50% max/roll out the short call to reduce cost basis further in the event price breaks the short call.
Opening (IRA): IWM March 15th 186 Monied Covered Call... for a 181.70 debit.
Comments: Buying stock and selling the -75 call again to emulate a 25 delta short put that is "defense ready" via roll of the short call.
4.30 ($430) max on buying power effect of 181.70; 2.37% ROC at max; 1.18% at 50% max.
Will generally look to take profit at 50% max and/or roll out the short call on price's traverse of the short call strike to reduce cost basis further.
IWM - iShares Russell 2000 - About to Drop MoreI always say that Price will always follow the MFI so when you see a strong Divergence between the MFI and the Price Movement it's only a matter of time. I've shown my Price Point Expectations in the relatively near term though it generally doesn't move too quickly.
Similar formation?Very similar formation on the 15 minute chart.
Interested to see what will happen.
$IWM at Inflection PointEarly next week important inflection point as the rest of the market decides if its ready to join mega/large caps or flop. AMEX:IWM
$IWM: Topping out at top end of channelThis is a follow-up from my AMEX:SPY and NASDAQ:QQQ note:-
-> Classic top out with MACD peaking at +2.5x standard deviation and accumulated volume topping out at +3.5x standard deviation.
-> Very likely witnessing a lower high forming at 0.618x fibonacci retracement.
IWM Channel BreakoutIWM is trying to break back out of the channel it's been in since April 2022. It broke out briefly in late December, but was rejected. This second breakout attempt looks promising, and usually leads to ATH after this much consolidation. Lots of earnings reports this week, but if the market holds up, small caps should have some room to run.
$IWM Weekly Chart Bear FlagIf this pattern fails, best moves come from failed moves. The technical analysis for AMEX:IWM (Russell 2000 ETF) on the weekly chart indicates the formation of a bear flag pattern. In technical analysis, a bear flag pattern typically appears as a downward-sloping channel or rectangle on a price chart. It forms after a significant downward price movement, followed by a period of consolidation characterized by lower highs and lower lows. This pattern suggests that the downward trend may continue, with the potential for further price declines. Traders often interpret a bear flag as a signal to sell or short the asset in anticipation of further downside movement.
