Calling The Breakdown In IWM ... What's Next?
by Mike Paulenoff
January 23, 2022 • 10:50 AM EST
This past Tuesday, January 18, Mike Paulenoff alerted MPTrader subscribers to a developing breakdown in the Russell 2000 Small Cap ETF (IWM).
Mike noted that his Point & Figure chart exhibited an ominous topping formation that threatened to send the IWM nearly 20% lower (downside target near 170) if the Small Cap ETF, which was trading at 209.39 at the time, violated its support plateau and printed 207.50.
IWM pressed beneath that level on Wednesday, prompting a follow-up by Mike in which he noted his next lower target was in the vicinity of 195.50.
That initial target came close to being reached by week's end, with IWM closing at its lows at 196.99.
Where is IWM headed next?
Mike's Daily Chart shows the vertically-falling price structure heading for a Fibonacci target zone projected into the 170 to 187 target zone that will amount to a 38% to 50% correction of the post-Pandemic bull phase.
The price action this coming Monday and Tuesday, in particular, will be extremely telling, especially ahead of Wednesday's FOMC Policy Statement and Powell press conference. Will IWM reach its projected downside targets and possibly reverse ahead of or in reaction to the Fed Meeting?
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Back on March 1, 2022, Mike Paulenoff posted a technical "heads-up" about JPM for members of MPTrader.com, writing:
"JPM has broken down in glaring fashion from a 12-month Top Formation that my pattern work addressed four weeks ago in case JPM sustained beneath 139-140. Today's low at 134.15 violated my shallowest target zone of 135.50-137.50, and points next to 128-130, with an outlier target zone in the vicinity of 115.
Last Monday morning, May 2, as the equity market careened to the downside ahead of Wednesday's FOMC meeting and the prospect of the biggest rate hike in decades (50 bps), Mike Paulenoff alerted MPTrader members to a potentially significant developing technical setup in AMZN, which had hit a new 13-month low.
Mike wrote: "AMZN pressed to a new corrective low at 2367.50 this AM, a full 37% beneath its ATH.
On Thursday, April 14, Mike Paulenoff cautioned MPTader members about possible near-term upside exhaustion in YIELD and downside exhaustion in longer-term bond prices (and the TLT), writing:
"10 Year YIELD spiked to a new multi-year high at 2.84% today, but Daily Momentum remains well below yesterday's Momentum high, which is our first indication that perhaps the vertical assault in benchmark YIELD is nearing upside exhaustion.
JPM (JP Morgan) reports quarterly earnings this coming Wednesday during pre-market hours. Investor reaction to this particular report is positioned to have a significant influence on the price of the stock. JPM's outspoken and high profile CEO Jamie Dimon already has warned us that changing (i.e.
On Monday March 21 Mike Paulenoff posted a bullish alert on MPC (Marathon Petroleum Corp) to MPTrader members, writing:
"MPC popped out of my research over the weekend largely because its technical setup argues that all of the action off of its February high at 81.39 (see my attached Daily Chart) has carved out a high-level bullish digestion period and pattern above 72.50, and if preserved, projects to a thrust into a new upleg above 81.
