Small Caps are setting up for a move. $IWM – July 9, 2024
This is Scott McGregor at Scott Trades on Twitter with StockMarketMentor.com and your Chart of the Day. I want to take a look at IWM ( NYSEARCA: IWM ) because I’m interested to know if Small-Cap will act positively following CPI coming out on Thursday.
Fed Chair Powell was on Capitol Hill today and he didn’t give us any indication about when they will cut interest rates. But my thought is, if CPI comes in below expectations we may start to get a pump here in some of the Small-Cap stocks, as a lot of the Small-Cap stocks are very highly interest rate sensitive.
The setup that I’m looking for to play out here on IWM ( NYSEARCA: IWM ) is, I want to see if this index can break above this clear downward-sloping trendline of resistance. And you can also see it has a pretty clear upward-sloping trendline of support. Price action is tightening up as we lead into CPI.
I’m looking to see which direction this breaks, if we break to the upside because we get positive CPI news, that would be great. If we break to the downside because we got negative CPI news, not so great. But ultimately, we’re looking for a resolution of this tightening pattern, ideally to the upside.
If you are looking at this right now you probably want to have an alert just above that $203.00 level. That will give us an indication that it’s trying to make a higher high, at least short-term, here on the daily chart, and is back above all the key moving averages.
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