Here is the IWM’s inverted head-and-shoulders pattern (click to enlarge):
The IWM’s neckline is on the chopping block. If Miss Market gives the thumbs down, it will be chopped off. A close under $55 would be bad news for the market. It’s never a good sign when the small-cap gamblers leave the casino.
The neckline could well provide support and end the market’s sell-off. However, the IWM has already back-tested the neckline, and really shouldn’t be doing so again. That is a sign of weakness, if not catastrophe just yet.
Here is my latest Blog Post:
Mini Correction, Mini Recovery Then Massive Correction?
http://bit.ly/13mQni
Open gap at 905 to 910 will get filled. I see the leaves falling already.
A scenario: complete a 5 subwave structure down which breaks the support line from 666-869. Then, when we see that subwave 5 complete, rally to retest the support line from below (and maybe even recapture it, providing a head-fake for the bulls and snare more retail money). Then, start to wind our way down to 834.5-860 range, preferably spiking/hitting at least 850-853 (50 fib and br. top lower trendline). Then, (absent catastrophic news that would cause sell, sell, sell) a rise to 940-976 (possibly higher). THEN start our massive move down. Will get tighter numbers as we go.
Things that make you go hmmmmm:
fun + red = Fed
red + fun = run
http://bespokeinvest.typepad.com/bespoke/2009/09/not-a-good-day-to-have-strong-volume.html
more red fun or like yerk said stop listening to these bespoke people
JG — I’m with K thinking we may get a last swan song for the rest of this week before we head south. There’s a bit of POMO money left, and three bad days may have enticed enough bears to join to power one more squeeze.