Snapback Bounce - March 8, 2012

[Billy]

The IWM robot entered a new short position Wednesday at the open (78.91) with an initial stop at 80.57.
The 20 DMF briefly spiked above 0% at 15:45 pm before closing back down at -0.09%. It would switch back to a neutral signal with a close above porosity at +0.10%. Even in that case, the IWM robot will need to evaluate the EOD ST/LT edges before deciding its next action. A secondary short entry is advised today with a limit of 80.13.

IWM is in the middle of a typical snapback bounce from short term oversold which usually expires around the declining 5-day VWAP (80.25). The cluster strengths are about equal both for support and resistance. As long as Quarterly R1 (80.45) is not decisively broken, the pullback scenario stays technically alive. The bounce is happening with moderate 20 DMF and low volume so far; hence a slightly bearish bias is still at play but probably not enough to encourage large positions or leverage.



GDX is consolidating with a flat GDX MF. All edges and floor clusters are still pointing to the downside, but no new position is advised.
Billy