It is frequent to see some enthusiasm on Mondays after a weekend examination of an obvious strong uptrend. If it is too obvious, beware! Tuesdays often reverse the prevalent trend and Monday’s flat close following a strong start of the session may pave the way for a Turnaround Tuesday.
The 20 DMF finally closed weak in the last minutes of Monday trading with a negative divergence for IWM’s fate.
At this time of writing, the futures markets are testing yesterday’s low prices around weekly pivot (77.63) where large players did not commit much to the long side yesterday. If we have a large gap down open and the RT 20 DMF doesn’t bounce quickly, we’ll have another clue that professional buy programs are set in a pause mode for the second day in a row.
Volatility has contracted so much, that the new floor support and resistance clusters strength imbalances are now almost neutral. A decisive break under Weekly pivot (77.63) confirmed by a break of Daily S1 (77.52) will likely lead to weekly S1 (76.75) as the next potential scale-in level for market makers. Confluence of Monthly R1 (75.90) and 200-day moving average (75.77) would be a more serious bumper in case of a more pronounced selloff.
The day’s advised short entry limit at 79.31 is just above our initial robot position stop at 79.23. As a reminder, the IWM robot never exits and enters positions on the same day and always waits for an overnight confirmation. New secondary positions guidelines are for discretionary traders.
The GDX MF is 2.3 days away from a short signal and was rather weak yesterday into the close in spite of GDX holding to its gains. The robot is holding its position and no new entries are advised for today.
Billy
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