IWM / SRTY

The IWM looks the weakest all the way around from futures to equities ETFs, the play on that in my view with where the IWM is now is possibly a put, although I prefer that in to some upside momentum, I still think SRTY the 3x leveraged IWM short makes sense here and has decent leverage, as long as you use risk management and position sizing, the draw down in these is manageable, although I doubt draw down will be a problem moving forward for SRTY (long) which gives you 3x leveraged IWM short exposure.

 IWM 1 min, the noticeable thing is the end of day deterioration yesterday, today is not much better, but the EOD deterioration (gosh, I just heard that word 100 times at the dentist) fits with everything else seen late yesterday afternoon and generally this week.

 With a 2 min divergence also in place that rules out a consolidation and makes a move down much higher probability, 1 min negative only is a 50/50 coin toss between an intraday pullback or lateral consolidation.

The trend damage is easily seen here on the 3 min chart which is also migration, it would be amazing for the IWM to hold up much longer.

The 10 min chart clearly shows the damage specific to this week which has been everywhere in leading indicators, credit, etc.

We can keep on going, but I need to keep on going.

SRTY, the long play to go short the IWM with 3x leverage... This is well suited to a swing type trade, that's initially what I'm envisioning unless I find leading indicators have a much bigger hole in them this morning than what they did yesterday.

 Intraday SRTY, again the theme of late day , afternoon IWM damage is seen here with the positive divergence in to yesterday's EOD.

The 10 min chart as quick confirmation of the IWM 10 min, quite a leading divegrence, a noice gap above as well which is a magnet.

Looking at the 30 min chart there's an interesting pattern , all of the individual positive divergences sent SRTY higher, but there's so little distribution at the top, I'm thinking this looks more like 1 bug accumulation zone with a large leading positive divergence in SRTY, this is sort of what we were seeing in AAPL before it took off to the upside the last few weeks.

I would look at this carefully before dismissing it and in my view, I'd make sure to allow enough room on the stop to take advantage of this and not be driven out on an intraday emotional move as the market is obviously more volatile as we expected, still I have no problems entering SRTY right here.