IWM 1D IWM is currently in a make or break spot, with the potential to drag the market higher if it can show some strength.
IWM trade ideas
Rolling (IRA): IWM February 25th 193 Short Put to March 31st 178... for a .58 credit.
Comments: The 193 isn't at 50% max yet, but it's the highest strike I've got in my short put ladder, so taking the opportunity to both realize a little gain, strike improve, and receive a credit for doing it. Total credits collected of 2.09 (See Post Below) +.58 = 2.67 relative to a current price for the March 31st 178 of 1.93, so I've realized gains of .74 ($74) so far.
Rolling (IRA): IWM February 18th 194 Short Put to March 25th 178... for an .83 credit.
Comments: With only 7 days to go, rolling down and out to the strike paying at least 1% of the strike price in credit. Total credits collected of 3.53 (See Post Below) + .83 = 4.36 relative to the March 25th 178's current value of 1.80, so I've realized gains of 2.56 ($256) so far.
$IWM Russel 2000 - Small caps previous support now resistance?Small caps tend to lead the market. Not a great picture as we saw a strong reversal off previous support yesterday. Technically we have the 50dma trading below both the declining 200day sma and emas. The moving averages are pointing down and we are still under the anchored vwaps from the previous highs. We also seem to be forming a rising wedge formation which are usually continuation patterns in the direction of the previous trend (currently down). Not much to be bullish about in this chart, so odds are in favour of further downside, unless we can climb above a mountain of significant resistance levels above (something which seems unlikely at this stage).
IWM: Handoff RejectionIWM rejected a crucial AVWAP handoff and appears to be giving us a low risk short entry. Notice how price action gave us a repetition of the previous distribution pattern before moving to the downside. That quick fake above the handoff should add fuel to the flame.
IWM MAJOR UPSWING THE BEAR ENDED The wave structure has dropped in a perfect A=C From the Peak to the low 2020 . and has dropped also a near perfect FIB .382 LOOK FOR BIG RALLY IT HAS STARTED . It dropped to the panic cycle fore cast date jan 27 +or - 1
Bearish SharkI have been following this bearish Shark forming on the 2hr chart for a bit. I think there is a great shorting opportunity that will presents itself soon. Understanding the market structure and the macro environment, there is no rush to take bearish trade, but one should be ready as tightening cycle starts to become reality. Should be an interesting next few weeks. All the best!
IWM at critical resistance before reversal or next levelWill it go up or down? IWM at critical resistance before reversal or next level.
$IWM — Market Forecast UpdateThe Russell2000 needs to be stopped; the small cap index is filled with flaky names that have yet to make profit.
These companies, for the most part, don't earn money.
This index will continue to get crushed.
We played the upside breakout to 240s, and we also played the downside break to 190s.
I called the top on this index at 225.
I am forecasting lower.
The CCI is egregiously overextended, we have pitiful volume on strong moves to the upside, and we just created a gap from today's strong move higher.
We have a recipe for a 500% trade with put options.
IWM 180/175 SpreadThis idea is related to my earlier idea. Check it out there for logic as the logic for this trade was essentially the same. In addition to the logic:
1. The return profile was there 10% Return on Margin
2. Appropriate Delta
3. Lovely Cushion / Level for the trade.
See linked idea for technical logic
IWM 184/179 Mar 4th Put SpreadTrade entered today based on my thinking that
1. This is our second green bar in a row, and I believe that either we have found a new range in the 190-200 range or we are headed back up. Which leads me to point number two
2. If we are in fact in a range then the 184 short strike is outside of that range and then some, providing a decent margin of error.
184 was also the 16 delta short strike at the time, and met the return metrics for the trade (10% return on margin required - AKA Max loss). The plan will remain with these trades to close at -200% or take profit at +50%.
Fill on these was -0.57 on average after commissions.
That is it, mechanical and S/R based. Sorry there isnt more secret sauce!
Russell 2000 (IWM) Breaks Major 1-Year Support, More DownsideRussell 2000 represented by its ETF counterpart IWM has now broken a major 1-year support level. This level has provided support (with only minor breaks that ended up reversing) since approximately February 2021.
Interestingly, IWM had a failed breakout / rally back in early November 2021. After about 12 trading sessions, the breakout completely collapsed and price re-entered the trading range (shown in the chart above as a yellow-tinted trading channel).
Moreover, Stochastics and ADX/DMI confirm that a downtrend is well underway in the short term (and perhaps the intermediate term). ADX / DMI shows trend levels rising on the daily chart with ADX at 29.70 and -DI rising well above +DI at approx. 36.9. On the weekly chart (not shown above), the ADX / DMI shows even strong downtrend levels at 30.47. The Awesome Oscillator shows increasing downward momentum on the daily chart as well as the weekly chart. And the Fast Stochastics Oscillator (13/1/3) shows oversold readings, but oversold readings in a downtrend tend to confirm the trend and can remain oversold (i.e., not a buy signal in a downtrend). On the weekly chart, my Fast Stochastic shows a pattern characteristic of a downtrend as %D has been printing for the most part under the 30 level for about 8 weeks, with the week of January 3, 2022 rising to 32, barely above the 30 level before turning lower gain. (Note that January 3, 2022 was the end of the year-end Santa Claus rally.)
With this breakdown, what happens next? Nothing is certain, but technical analysis yields reasonable estimates. A bounce is likely given that Stochastics are quite oversold on all time frames. Even though oversold levels may persist, a better risk-reward entry may be provided when and if IWM bounces (perhaps tomorrow). The bounce could retrace a portion of the recent downward move. I might consider a bounce worth selling between 208-210.
I am trading this cautiously (smaller position) with IWM call credit spread. I chose an OTM call credit spread today as a way of keeping risk smaller (i.e., more premium collected = lower capital risk). But OTM call credit spreads also increase the risk of failure because they are OTM. A higher probability play may be an ITM call credit spread (i.e., around 210-215 strikes)—but because the premium collected will be much lower, the risk is higher and the risk reward ratio is worse.
Near-term target : Approximately 190-195. There could be a bounce as described above.
Stop : A close above 211-212. (If IWM starts dropping like a rock tomorrow, it might be better to avoid chasing and wait for the next bounce if there is one.) A better entry would occur after an overbought signal on the Fast Stochastics using shorter term timeframes intraday.
DISCLAIMER: Please do not trade options or IWM securities unless you understand risk, position sizing, and the security product being traded. And please do your own research. I cannot provide financial advice and am not licensed nor offering services as a financial advisor.
IWM time to look upIWM from 244 to 187. That's a fall.
Ok let's see how fib levels are set up at the moment, 209 is monthly fib resistance, I like abc pattern, so let's consider the low is in place and next stop loss is 195 and take profit is monthly fib 209. Once that's confirmed the next target is 50% to 61.8% that gives us 200-222. Once we are there, we will see how it goes. Please do your analysis as well and if your opinion does not match mine then good luck to you.
IVM death cross, waiting price to challenge supply zoneI wonder if we will se a continuation of a downtrend or we will resume uptrend.
Please do not short, if short please set stop loss
$IWM likely retest the low range of January$IWM the small-cap index ETF, which broke down its 1 year-long distribution area, is looking like the second weakest index in terms of structure (still hasn't made past the fib 0.382 level which indicates weakness)
- With 2 weekly rejection candles, the index is looking like it will inevitably test the bottom of the trading range, there's around a 4% downside from the current level.
Personal trade:
Taken short position from the 0.382 level
- Entry 201
- first take profit 194, second take profit 191.
- Stop-loss 205.
Rolling: IWM February 25th 197/198 Short Strangle to March 18th... 199 short straddle.
Comments: As with my February 18th IWM tight short strangle, rolling out my February 25th to the March 18th 199 short straddle for a 4.24 credit. Total credits collected of 12.80 relative to the March 18th 199 short straddle price of 14.46, so also still slightly underwater. I'll continue naturally continue to do defensive adjustments as necessary to keep these setups from getting too directional.
Rolling: IWM February 18th 198/197 Short Strangle to March 11th ... 199 short straddle for a 4.24 credit.
Comments: Locking in some realized gains by rolling the tight short strangle out to the March 11th 199 short straddle with 14 days to go. Total credits collected of 12.10 relative to the March 18th 199 short straddle price of 13.01, so it's still slightly underwater (credits collected are less than the current price of the setup).
Opening (IRA): IWM April 14th 160 Short Put... for a 1.73 credit.
Comments: Adding a rung out in the April monthly as part of a longer-dated strategy to emulate dollar cost averaging into the broad market using SPY, IWM, and QQQ. Targeting the strike paying at least 1% of the strike price in credit. Will generally look to roll at 50% max.
IWM Testing Descending Channel IWM is testing a descending channel.
The flattening/pancaking of heikin ashi signals an aggressive impending move (up or down, who knows really).
Odds are actually in favour of a move up, tbh.
Probability of low less than or equal to 200 is 14% (Based on past 2 months of performance data).
Probability of a high greater than or equal to 200 is 97% (Based on past 2 months performance of data).
My recommendation, if you want the odds in your favour:
If you wanna go long: Aim to go long below 200 (if we test below again), odds will be in your favour for a move to the upside in the coming 1 to 2 weeks.
If you wanna go short: Aim to go short above 202/203 (if we test that high) but be careful because if we break that descending channel, we may see an aggressive pop.
The lines in green are realistic price targets for a short position. However, I have already closed out my short position at 199 this morning.
I am leaning towards a potential long entry personally, but waiting to see if we get an EOD sell off and aiming long below 200 if we can see that.
My focus is actually on XOM right now, but hoping to add an IWM position by EOD if market permits :).
Best of luck!
DISCLAIMER:
Not financial advice. Not a financial advisor. Just an ex-epidemiologist who enjoys mathematical modeling.
At the end of the day, I trade price action. I use regression analysis to plan my entries and exits and chart support and resistance levels (I find it more accurate than looking at the chart). However, its not always correct and I am sometimes wrong.
Manage your risk! Its okay to be wrong, and you will be wrong, just manage your risk and you will live to see another day. Its not the end of the world :).
My linear regression models are done in SPSS. I can't share pictures, but am happy to answer your questions.
Rolled (IRA): IWM March 11th 171 Short Put to March 18th 181... for a 1.24 credit.
Comments: After a few short days, this one's already at 50% max, so I rolled it out to 16 delta strike in the expiry nearest 45 days. Total credits collected of 2.59 (See Post Below) plus the 1.24 here or 3.83 relative to the 181 short put price of 2.13, so I've realized gains of 1.70 ($170) by rolling here.
tightening range small caps broke bull (IWM)the tightening range broke to the upside. if we can treat the area as support we could continue higher into upper 202s
IWM Iron Condor 183/212 Video says it all, two part trade which started as a put credit spread. Added call side for some P/L offset if we continue to move downwards.
Russell 2K (IWM) showing Wyckoff Distribution?Richard Wyckoff theorized that one could understand the market and its movement through analysis of supply and demand, which can be ascertained from studying price action, volume, and time. According to Wyckoff, the market moves in cycles. First, there is a period of accumulation followed by a mark up period. Then there is a period of distribution followed by a mark down period. The cycle then repeats itself. Seeking to improve efficiency when trading, Wyckoff created the Wyckoff schematics which depict trading ranges of accumulation and distribution by smart money.
In 2020, we saw a major market crash as COVID caused the world to shut down. Once the F.U.D. diminished, the Wyckoff accumulation cycle began and the Russell was quickly marked up in a matter of months. In 2021, the Russell has traded mostly sideways. Following Wyckoff's cycle, one could presume that this is the Wyckoff distribution pattern which can take up to a year to fulfill.
The Wyckoff Distribution Pattern is split into phases. I have outlined each phase on the chart to provide clarity. The distribution is broken down as such:
Phase A:
The Preliminary Supply (PSY) is established. This is where big money begins to offload some of their accumulated position. It is bought up by retail traders and sent to new highs. Big money then offloads a larger portion of their position at the Buying Climax (BC). This causes a massive wave of selling as supply significantly outweighs demand. Panic selling ensues and stop losses are triggered. An Automatic Reaction (AR) occurs as the supply and demand balance out. The low of the AR and high of the BC establish a trading range for the rest of the distribution.
Phase B:
This phase consists of supply and demand testing. Buyers will attempt to reclaim the trend through upthrusts (UT) but big money meets this demand with more supply and sends shares back into the trading range. Big money will then perform secondary tests (ST) and look for signs of weakness (SOW) to assess the remaining supply and demand imbalances. This results in a long period of consolidation. Not that we should see low volume in the middle of the range and volume spikes toward the boundaries.
Phase C (Optional):
This phase is characterized as a false breakout. It is used to trick traders out of their positions so big money can offload more supply, sending shares lower in one final push. Upthrust after Distribution (UTAD)
Phase D:
This phase will often illustrate a clear imbalance between supply and demand. Price will show large volume and price declines toward the lower boundary of the trading range. At this point, big money has little to no long position left and has likely initiated a short position. The market will begin to make a down-trending structure of lower highs and lower lows. I believe we are currently at this phase of the cycle.
Phase E:
The mark down period begins. There are several possible catalysts to trigger phase E. The most obvious is the anticipation of rate hikes from the Fed. From here, we will begin to look for the start of the next accumulation period.
**It is important to note that the Wyckoff Distribution Pattern is only a model and that the chart wont match it perfectly. As long as the fundamental concepts of the model hold true, the pattern should work. I will be looking for short signals and confirmations via market structure and volume.
Let me know your thoughts on this unusually long explanation. Happy trading!
