Just a quick follow-up to yesterday’s musings on the Russell. What I didn’t include yesterday but am including today is the weekly chart of the $IWM. The pattern remains a complete repeat of the 2011 scenario in that a major trend line was broken and then retested. That’s in essence what has happened here.
In 2011 the scenario took 2-3 weeks to unfold with an intermittent bounce after the initial trend line rejection, but then selling started in earnest. Note of course the 2011 case began also in July:
This does not mean the pattern will repeat itself, but the similarity is certainly striking. However, were the scenario to play out the weekly 150MA may end up being a very nice swing long opportunity into the 4th quarter.
Categories: Daily Market Brief