Commentary

IWM

Best breakout chances among major market ETFs judging by distance from all time high.

Achievable targets of 159.08 and 161.19

Weekly Chart

IWM peaked and peeked above the 52 week moving average for the 3 week period ending March 8. It dipped below and tested the 13 week average. Last week’s move regained 52 week average levels and fired a weekly buy signal – when the weekly candle closed green.

The recent pullback was not too damaging, a low of 146.50 or so to the 38.2% fib would have been normal but IWM reversed at about 30%. That could indicate further consolidation before breaking out, but giving the benefit of the doubt to the bullish interpretation of the recovery showing strength isn’t a big stretch.

The PPO histogram flashing green simultaneously to the rate of change study on the price graph is an important confirmation of a bullish hypothesis.

The 13 and 52 week moving averages are approaching each other forming a pincers, seems more favorable to break above rather than below that area.

Daily Chart

Notice the pincers forming by the 18 and 54 day moving averages. A buy signal was given on April 1 with that candle colored green. An entry was mechanically made at the close of 154.76. The mechanical system would have held until the close yesterday and sold for 157.38. That worked out pretty well but it is sort of an accident; I think that humans can trade these signals at least equally as well as the algorithm as long as they keep a clear mind.

Should IWM close at around this level today, the green candle will cause the algorithm to buy at the close.

April 1 was a tricky buy because the price level was at a down trend line that could be drawn from 159.08 which was the swing high made on February 25. That trend line has been convincingly broken although a new trend line drawn from that top to current levels would still slope down.

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