Failed break down with $IWM?
Very convincing move today post FOMC, it appears the market priced in a 50bps hike and likes what it's heard from Mr Powell… it's a day by day / week by week thing just now but it's encouraging.I'll take it. pic.twitter.com/mPsVEiDtDy
— Sam McCallum 🏴 (@Honeystocks1) May 4, 2022
Today’s Chart of the Day was shared by Sam McCallum (@Honeystocks1). It’s a daily candlestick chart of the Russell 2000 ($IWM) over the past year and a half. The major indices were trading at pretty delicate levels heading into today’s Fed announcement, but they rebounded right where they needed to. Sam points out that the Russell 2000 has formed a failed breakdown over the past few sessions. As we know, failed breakdowns often lead to sharp moves higher. It also reclaimed the VWAP from the COVID lows that it broke last week. This is bullish for the Russell 2000 in the short term. However, there is still a lot of technical damage to repair considering the index is still 10% below its declining 200-day moving average and 20% below its all-time highs. At this point, the next major resistance level is around $211, which is about 9% higher from here.