2022-01-30

Chart Wars: IWM

The Russell 2000 Index is arguably the cleanest of all the charts. There is a huge topping pattern with overhead supply. It is about 9 percent away from Friday's close, plenty of room for face-ripping rallies. On the other side, there is barely any support between the low of last week and the November 2020 level. A symmetrical repeat of the move up would see a small bounce, maybe followthrough buying on Monday morning, followed by a relentless drop of about 15 percent, to around $165 per share.
The volume profile lines up almost perfectly with the chart. The 10-year shows barely any support, while the 2-year shows there is an airgap below $190. My horizontal line is at $191.26 on the chart above, but I've since adjusted to Friday's low because that is the new psychological line-in-the-sand.

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