Chart of the day

Where do we stand fundamentally?

Massive Inflows Post-Election: Following Donald Trump's second presidential victory, IWM experienced record inflows, with $3.9 billion added in a single day—the highest in over 17 years. This surge reflects renewed investor confidence in U.S. small-cap stocks, fueled by expectations of looser regulations and a "risk-on" market approach.

Analysts highlight the Russell 2000 index's pivotal role in gauging broader market health. With increasing interest in small caps, some experts predict a stronger rebound in 2024. However, concerns about rising interest rates' impact on small-cap companies persist, making it a key focus for investors

IWM is reaching an important resistance of 240 which is half of the channel line and could be an end of the first wave higher for an extension to 305. We need to see a breakout here for an upside extension to 305 and possibly higher. I expect a deeper pullback here in the second wave of the third long-term for a retest of 190 previously broken strong upside resistance before a continuation higher.

We are in the development of the second wave short-term before a rally higher in the third long-term wave. Before an extension higher we could see a pullback from here in the short term. Invalidation of a swing lower will happen upon a confirmed break above 240.

_{Try a short trade entry with a stop loss above 240 to target 190.}