IWM Gap Down June 15, 2011

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The pre-market indicates an opening gap down around Daily pivot (79.17) and Weekly pivot (78.91).
Technically, the weekly pivot support will not officially be in jeopardy before a breakdown of the next daily level, DS1 at 78.67. From there, a fill of yesterday's gap down to MS2 might become possible.

However, the cluster structure is very favorable with a resistance/support cluster strength ratio of 5:12.
Yesterday was a trend day and usually it is followed by a range day before attempting a new trend day up.Hence, barring any surprises, the most likely scenario will be an initial retracement not much lower than DS1 (78.67) followed by a grinding rise up to a potential high for the range day of DR1 (79.96).
Due to opex week, there may be an attempt of making two up trend days in a row for reaching maximal pain at options expiration. Resistance is weak today and large players may be tempted to take advantage of the setup. We should then see an explosive move to the upside at some point.
The trailing stop of the existing long position is rising slowly but still remains well protected under the rising 200-day moving average.
I may not be available today for answering your comments or questions until long after the open. Apologies for the inconvenience.
Billy

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