Monday, July 7, 2014

IWM Wants to Bounce

As it should be as the IWM (should) leads the market, it has been beaten up the most intraday, it's no wonder the MSI is looking so weak today, however it does want to bounce, which I would use for any tactical entries (selling or shorting price strength) as this doesn't look to be anything more than that. I have the best signals for a bounce in the IWM, Russell 2000 futures have an intraday 1 min positive, but at 5 mins 3C is following price nearly exactly.

Here's the IWM, with the Dow still holding 17k which isn't a surprise on the first test, it should move most of the averages, I like the Q's in particular for a possible short (SQQQ long) entry or a put option position.

 This is why the IWM bounce doesn't really matter and why I'd use it to sell/short in to, clearly negative at intermediate timeframes like 15 min...

Clearly negative on 60 min longer timeframes, note the positive at the mid-May area where we expected a move above the SPX's 3 month range.

 1 min IWM intraday

2 min positive relative divergence (weaker form)

5 min relative divergence (very weak ).

As I said, it looks like a bounce only, the averages have had a lot of dispersion in relative performance, if I were to play anything as a short term weekly call on an IWM bounce, it would be IWM calls, but I'm not so sure I'd be willing to take that risk unless there were significantly more improvement.

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