IWM longer term view

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I thought it'd be fun given the new year to throw up a longer term chart, even though I'm generally playing weekly options so hourly is typically as long term as I go.
What I've shown here is a weekly chart going back to the last decent correction in 2012. I won't point out the obvious rally, but what I will say is that the waves do contain a lot of overlap, which is generally the sign of an ending pattern.
In addition, the distance price has pulled away from both the blue 26 period base line, and the cloud is very telling. Normal market behavior is to revisit the averages periodically. Healthy pullbacks provide places for bargain hunters to buy their stocks at a good price. There has been none of that. The market hasn't even touched the average in all of 2013!
To me this is a recipe for a very sharp and deep correction. This isn't about predicting the end of days or anything, but how about for a start at least looking at the possibility of revisiting the cloud here. Even that is quite a long way down, and it doesn't even break the uptrend. So even if you're a perma-bull, or missed the rally, rather than buying this up here in the nosebleed section, look for a store-wide sale.
Lastly, just to discuss the "when" part. It could turn down now, or it could drift higher in January. This count I have shown here will not be validated until price trades below say the 104 area. Until then, these waves can simply extend. I know that sounds non-committal, but just to share a little secret, nobody knows what the market is really going to do. The best we can do is try and figure out the most likely outcome, and wait for our bias to be validated.
The risk is more to the upside here, IMO             .

Happy trading in 2014
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