Originally Posted by
brrim
Billy; I have a different perspective on IWM which I wrote about last week and am reposting as this week's action adds support.
On a weekly chart of IWM there is a trendline connecting the 10/7/02 low, the 3/10/03 low and the 10/24/11 high.
This trendline was penetrated 3 weeks in a row in April, with the weekly close in each instance above the TL.
Last week the line was again broken, but the close was below it.
The line is at 79.50.
This week Monday's high was 79.60.
Today we hit 79.49 early in the day and then got as high as 79.55.
I don't think any of these numbers are a coincidence.
I think it's interesting that the IWM Robot short at 79.81 has not yet triggered. If we don't get the Robot price on Day 1 we usually do on Day 2. My perspective is that 79.50 is too strong a resistance line.
When this weekly trendline has been broken the corrections in IWM from the break to the low have been
46.46% 10/08
16.20% 5/10
20.93% 8/11
Thus either Major correction or Bear Market.
Right now this week's IWM action is scissored between 79.50ish and a head and shoulders neckline at 78. The week low so far is 77.97
We will see how this plays out, but it is my impression that this TL is providing important information about the intermediate trend at least for small caps. Of course a weekly close above this line would have potentially bullish implications.
Best regards,
Robert