IWM Very Strong Buy Setup – June 10, 2011

[Billy]

The IWM Robot’s job is not to try picking bottoms but to most objectively identify optimal risk-reward trading setup opportunities. Today is the best of all setups it could identify since it went online 3 months ago.
The limit long entry price of 78.39 is optimal in the sense that a decline to that level will be immediately cushioned by the confluence of MS2 (78.09) and WS2 (77.97). Even if these supports were to be broken, the rising 200-day moving average (76.74) will provide very strong support just above our initial stop of 76.64.
If today’s action is strong enough to miss the limit entry price, because the buy signal is most likely to remain active tomorrow, a close today above QS1 (79.32) may be discretionarily bought. The new official limit entry price for the robot will only be known after the close, but we are 100% certain that it will be above QS1. So, the nearest you enter to QS1 the better. I repeat that it is only valid with a close at or above 79.32.
As promised, I attach an excel file with IWM and GDX floor levels and clusters.
Billy
Forum 110610.xlsx