Each week I look at the Russell 2000 tracking ETF IWM to gauge where the market is at and what the dominant trend is on the hourly, daily and weekly timeframes. For more on how I trade, click here.
The last couple weeks I’ve been talking about how ominous that weekly chart looked on the $IWM. That’s because it looked like it was about to fall off a cliff. Not good if you like to go long. Very good if you like trading short or buying inverse ETFs.
To help with your short side strategies, last week I wrote a blog about going short called “3 Ways To Make Money When the Market Is Going Down“.
With that said, last week the market finally got a little relief from the heavy sell-off and jumped above and closed above the 50 hour MA for the first time in a few weeks. That also added a little strength to the weekly chart. While that chart is still below the 50 week MA, we saw a LOT of volume come into this week’s bar as it closed positive.
Let’s take a look at the charts.
Wow, looks like that $107.09 area I highlighted last week has really been a point of interest, acting as both support and resistance over the last few weeks. It goes back even further than that and I really believe it’s the key to where we’re heading. If it holds, we’re going up. If it breaks, well, kabooom.
Not much new to report on the daily. Still below the 50 MA and far away from new highs.
Once again, the weekly is the most interesting chart in the world to me. look at that volume that came in on that bar. And that volume is important because we’re right at that important line of support. Because someone was stepping in to buy there. As you can see that line of support goes all the way back to the beginning of the year. It held 2 previous times, let’s see what it does here.
- Hourly Trend — Sideways/Up
- Daily Trend — Down
- Weekly Trend — Sideways/Down