Chart made with TrendSpider
If you follow me on Twitter, I wrote a post on Wednesday outlining my view of the key support levels being tested in the Russell 2000.
Today, IWM gapped down at the open right at 155.52, and pin-pricked swiftly and deeply right through all three levels of support – an alignment of the 50-day moving average, 200-day moving average, and 61.8% Fibonacci retracement – before recovering and closing green on the day (see chart at the very top). The price action formed a long wick hammer candle, doing exactly what it needed to send a bullish message to anyone remaining long the index. It remains to be seen if this area holds, but there is a well-defined risk-reward setup at this confluence of support.
