The IWM/Russell 2000 at first glance doesn't look all that bad, but dig down a little deeper and an ugly trend is taking place and to a degree, already been in place.
At first glance, there doesn't appear to be anything of particular note, nothing ominous any way.
Draw in some trend lines and the bullish ascending triangle, which we talked about a few days ago and I suspected would likely see a head fake breakout that would fail, added the first component, the breakout (at the yellow arrow).
On an intraday chart, one could argue the most bullish case, there was no follow through on the breakout due to a gap fill yesterday, however with the gap filled now, the IWM is clearly below the triangle's apex ( a position that would suggest the breakout has indeed failed).
Today on a gap fill on light volume, the IWM also is maintaining the long tradition of kissing the pattern goodbye.
Today on the 1 min 3C chart, as the IWM tries to close the opening gap on declining volume, 3C has also gone negative.
The 15 min chart is pretty deeply negative and leading as the recent breakout attempt would have made the highest high on this chart, another seeming false breakout.
The 30 min chart which went positive before the October rally began has also gone deeply leading negative.
Although the SPX is always quoted among traders and the DOW in the media, the Russell 2000 is of critical importance and is the index that the F_E_D quotes and measures the "Wealth Effect". Because of the number and variety of issues in the R2k, it actually may be the most important average for us to watch and as you can see, looking a little deeper doesn't boost confidence in the average.
No comments:
Post a Comment