Yesterday's low in IWM hit my lower target zone exactly, but despite today's 2.1% upmove- second to the QQQ's 3.3% recovery, let's notice on the attached Daily chart that the IWM +2.1% is barely noticeable. In fact, today's range represents a relative feeble "Inside Day" compared with yesterday huge Red Candle. Clearly, the Small Cap ETF has its work cut out before triggering new buy signals.
One tangential relationship that might be impacting the trajectory of IWM is HYG, the High Yield Bond ETF. Notiec on the attached daily chart that HYG has carved out a massive 2+ year distribution top formation that is dangling above a potentially severe downturn period. Many of the Small Cap companies rely on financing in the high yield bond market, incurring higher rates to borrow money. If there is a growing perception in the market that hints at an economic slowdown, then HYG and IWM suffer coincidentally.