Anticipating IWM's Turns - Market Analysis for Jan 16th, 2021
by Mike Paulenoff
January 16, 2021 • 12:26 PM EST
Last Wednesday afternoon (Jan 13), with the IWM at 210.76, Mike Paulenoff told MPTrader members:
"The Russell 2000 Small Cap ETF is just about 0.5% off of its all time high. As long as any weakness is contained above 204.30, my near-term pattern set up from the 1/04 pullback low at 190.94 is poised for still higher ATHs above 211.73."
The IWM reached a high of 215 the very next day.
Meanwhile, Mike had also cautioned: "Juxtaposed against the above-mentioned constructive near-term pattern set up is a glaring negative Momentum Divergence (11/09 and 1/07), that provides us with an anecdotal warning signal that strength is on borrowed time, nearing exhaustion. Take the signal for what it's worth-- a warning, until the music stops in IWM."
In fact, on Friday, with IWM at 211.27, he wrote: "All eyes on 209.20 nearest support in IWM, which, if violated and sustained, will trigger an initial sell signal."
IWM pressed to a low at 208.26, triggering that preliminary sell signal.
What's next for IWM? Friday's move is certainly a warning signal that IWM is vulnerable to a meaningful correction after climbing 48% from its 9/24 pivot low, far outpacing the 22% gain for QQQ, and the 19% gain in SPY during the same time period. The Small Cap Index has a habit of leading into BOTH directions, which is precisely why Mike is closely tracking its set up for MPTrader members.
Join Mike in our MPTrader trading room for his technical updates and member conversation about IWM, as well as many stocks, ETFs, Indices, and commodities.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
markets, plus key ETF component stocks in sectors like technology, mining, and banking.
Sign up for a Free 7-day Trial!
On May 22, we introduced a budding bullish technical setup in RIG (TransOcean Ltd) to MPTrader members, noting:"RIG (TransOcean) is up 7% today, a thrust that immensely improves the technical position of the stock. RIG exhibits an extremely powerful near and intermediate-term setup that points to a next upside target zone of 6.80 to 7.10, but when overlaid on my attached Daily Chart, projects to 8.50... last is 6.36.
Well before the Artificial Intelligence (AI) hysteria was unleashed this past Thursday by the shockingly powerful earnings report from Nvidia (NVDA) that reset expectations for the growth and revenue potential of AI, our technical pattern analysis of MRVL provided an early heads-up for MPTrader members.
Just after the start of the New Year, on January 9, Mike Paulenoff posted the following missive to MPTrader members about EWJ (Japanese Country Fund ETF):In my reading and research this weekend, my eyebrows did a bit of a backward roll when I saw the budding technical setup in EWJ.
On April 21, AAPL climbed to a new 8-month recovery high of 168.16, representing a 35% gain from the January 2023 low. We alerted MPTrader members to the new high in AAPL, but attached a yellow caution flag to the update:"AAPL continues to intrigue me technically because the stock hit a new multi-month recovery high at 168.16 on Wednesday -- 35% above its Jan 3rd low, but stalled right at its 15-month resistance line that cuts across the price axis in the vicinity of 168.
On March 20, I posted the following technical alert to MPTrader members:"FCX (Freeport-McMoRan)-- Technically, let's notice that FCX appears to be in the U-Turn phase after the completion of a 7-week 25% corrective period that successfully tested the 200 DMA last week. If the commodity complex has fully corrected its post-pandemic-inflationary spiral bull phase (think Crude Oil, down 46% from its 2022 highs), then FCX with its concentration of Copper, Gold, Silver, and Oil is poised for a resurgence of strength...