Sharks Circle The Wounded Russell 2000! (IWM)
Hi friends! Welcome to this update analysis on the Russell 2000, via the IWM ETF! Let's get right to it! Looking at the daily chart, you can see that the Russell continues to form the right shoulder, of the primary head and shoulders pattern (in red.) Inside of the right shoulder, you can see that we're printing yet another head and shoulders formation (in blue) increasing the likelihood of a technical breakdown, which would produce a test the neckline of the primary head and shoulders formation. Such a move would complete the right shoulder, thus increasing the likelihood of a breakdown from there. The past two sessions have been bullish, each printing closes above the 50 EMA (in orange,) but the overall picture remains bearish.
On the MACD, there has been a bullish crossover, but we are still below the zero line, and volume has been declining on the chart. The declining volume is a sign that investors are moving to the sidelines, as they wait to see who this formation resolves itself.
Trade war tensions, an increasingly hawkish federal reserve, rising inflation, a flattening yield curve, and a technically overextended market, are just a few of the fundamental reasons why this market is showing signs of exhaustion. The overall formation here looks like a top is forming in the market, but even if we see a breakdown from the primary head and shoulders pattern, the IWM could hold support around the 135 level, thereby defining the bottom of what would be a rising uptrend channel. I say "would be" because the black trendline on the bottom of the channel is only projected from a single low. So, technically, that trendline doesn't even exist yet. I just have it on my chart to show where price could find support, and still maintain a parallel uptrend channel. In case you are wondering, the upper black trendline has multiple touches, and the lower black trendline is a clone of it.
For now, I will be watching for a reversal in the near future, which causes the head and shoulders patterns to complete themselves. I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
On the MACD, there has been a bullish crossover, but we are still below the zero line, and volume has been declining on the chart. The declining volume is a sign that investors are moving to the sidelines, as they wait to see who this formation resolves itself.
Trade war tensions, an increasingly hawkish federal reserve, rising inflation, a flattening yield curve, and a technically overextended market, are just a few of the fundamental reasons why this market is showing signs of exhaustion. The overall formation here looks like a top is forming in the market, but even if we see a breakdown from the primary head and shoulders pattern, the IWM could hold support around the 135 level, thereby defining the bottom of what would be a rising uptrend channel. I say "would be" because the black trendline on the bottom of the channel is only projected from a single low. So, technically, that trendline doesn't even exist yet. I just have it on my chart to show where price could find support, and still maintain a parallel uptrend channel. In case you are wondering, the upper black trendline has multiple touches, and the lower black trendline is a clone of it.
For now, I will be watching for a reversal in the near future, which causes the head and shoulders patterns to complete themselves. I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
評論:
