IWM Update

I think if there were a concept of two to take away from this update they'd be, "The market is VERY randomly random... Wall St. doesn't do anything without a reason" and "Parabolic Moves tend to have parabolic failures" and maybe "Beware the F_E_D knee-jerk response".

 Other than the Channel Buster concept which we've covered before, but I look forward to covering it again as this looks like it will be a textbook example, the notable feature on this chart is the parabolic move, these tend to end badly with a parabola to the downside, often faster than the move up.

This is also a good example of the F_E_D knee jerk effect because as of last night, I HAD NO IDEA HOW THEY'D RAMP THE FUTURES AFTER THE BEARISH PERFORMANCE AFTER THE 2 PM MINUTES. 

I speculated they may slam the Yen and let the EUR/JPY ramp the market and do it in the middle of the night when volumes are low, that's exactly what happened.

Also recall my warnings since we first identified some accumulation on Tuesday that, "A short duration move doesn't mean it won't be impressive" & "Wall St. doesn't do anything without a reason " and a half baked move that serves no purpose isn't worth creating which is what they were doing Tuesday and late yesterday. A move like today's will sell retail, they'll buy the strength, it touches them emotionally so this move serves a purpose.



 The 2 min IWM chart shows the accumulation late yesterday as mentioned above, again, although it's not a lot and can't support a lot and wasn't meant to, it doesn't mean it won't be impressive. This is exactly why I bring these things up if I see them in the market, it gives you an idea of what to expect so you don't make emotional decisions.

More than that, it allows us to create new positions like AAPL and SPY calls or the PCLN and IWM puts, MOVEMENT CREATES OPPORTUNITY, especially if you have some idea of what that movement is about.

The 2 min chart that started the channel buster, this wasn't random, you can see right there it was planned in advance, but not huge accumulation either, enough to get the job done and make money on the trade, but this is not accumulating the IWM for a bull market run.

This intraday 3 min chart shows me the high probability that this is a parabolic move that will fail, price alone tells me that, but adding confirmation is always good.