IWM Bear Trap Explained
Last Update: 9/18/2017
It has been over 6-months since I’ve first engaged with CALLS (LEAPS) on IWM and I’ve been buying the dips throughout, as I still believe IWM could become one of my biggest winners this year. On my last “IWM Analysis” I discussed the matter of how the August sell-off could be one last shake out before a massive bullish reversal, and also discussed potential bear trap (red box). When IWM was trading at 135ish in mid-August, it seemed as though everyone was freaking out and the small-caps world was ending, but I was buying the dip, NOT closing my positions out of fear. As of today, IWM is back above 140ish and holding above the important pivot (horizontal red) at 139ish. If we can keep the gap opening (from today) unfilled, I think it will fuel the minor-term sentiment going forward. 144-145 is going to be the next strong resistance (rising-channel resistance & 7/25 swing high at ATH). I believe, if bulls manage to bring the price back up to that rising-channel resistance at 144ish this time around, bulls will finally break above it and finally thrive. More updates later–I am still holding all of my CALLS since 136.53, 136.72, 138.46, 139.30, 140.18, & 141.05.
It’s good to see Russell 2000 finally seeing some strong move here last several weeks. Gap from Monday is still remains open which has been fueling this move last three days. However, should the price falls, buyers want to see 140ish level to hold to protect the gap to be unfilled (if it fills the gap we want to see 139-138 level to act as strong support), if we can do that I believe new ATH is coming soon here. I am still holding EVERYTHING-all of my CALLS since 136.53, 136.72, 138.46, 139.30, 140.18, & 141.05.
Just a while ago as it seems, everyone was freaking out and busy exiting or shorting the small-caps when the Russell has broken below the major support at 135.80ish on 8/18/2017. well, I was busy calling for the major reversal and buying the dips. Interestingly enough, as quickly as the Russell fell, it reversed just as quick as we are trading at a near all-time high level yet again. There were many shake outs and shenanigans throughout the months, but my analysis and forecast on the Russell hasn’t changed since the day one when I first engaged with IWM – I am still standing firm on that as I did on 8/18/2017. On my last market update video I talked about how it could go “straight up,” and I think it’s possible with the short-term ups-and-downs. However, should the price struggle to overcome the 144ish level, we probably want to see 142ish level to hold for the minor-term sentiment to stay bullish and this bullish momentum to stay alive. Let’s see how it plays out this week. I am still holding everything–all of my CALLS since 136.53, 136.72, 138.46, 139.30, 140.18, & 141.05.
PART 1, 2, 3 | IWM ANALYSIS