Mind the Gap: IWM Breaking Its 20 Day Moving Average, First Time Since Dec 19th

by Dan February 27, 2012 10:24 am • Commentary
  • We want to highlight a chart we are tracking fairly closely…..IWM breaking through its 20 day moving average, and if it closes below it, would be the first time since Dec 19th, 2011. The price action is also being confirmed by declining momentum as evidenced by its RSI rolling over.  
  • What we find possibly significant about this chart is that it could set up as an important price break for trend followers, and could signal a catalyst for equity weakness to follow.  Ok that is a lot of “coulds” but at this point we are spending lots of time looking for chinks in the armor of the is seemingly unstoppable…..and come on, the small cap etf is up 23% since the Dec 19th “head-fake close”.
  • we’re leaning on the side of a convincing break given the continued weakness in market breadth (as highlighted here) and the continued strength of bonds, the big money indicator…….BUT want to see this close below 20 day mva on large volume to convince us.

1 YR IWM chart breaking 20 day moving average from Bloomberg LP