This is an extremely difficult market in which you will find winning stocks .
The-Russell-2000 (as measured by-IWM) has gone sideways.
You have to be very good to select the end of the draw-down periods and go long in the winners.
The rotation into and out of stock groups has been fast and furious. As for-IWM:
I detect a pattern . This, combined with very negative indicators, are warning signs of a break to the down side.
In all fairness to you, I have been expecting a draw-down for six months, yet we continue to move side-ways.
Let's put it this way, your upside gain is 1% to 2%, down-side 10%-15% +. This is not a good risk/ reward ratio.
Here are ONE DOZEN negatives I see in-IWM, and why I feel this is a sell:
1. Sell in effect.
2. jaws NOW OPENED in tandem with sell Fractals. feeding in new down-trend. THIS IS YOUR DIRECTIONAL COMPASS.
3. (under chart) is ENTERING the shaded area.
4. Forward leading span (lower top indicator) is below the zero line. **
5. 34 day moving average (top indicator)-is .
6. Prices are trading into the . This is a sell signal.
8. Prices are trading below the Ki jun-Sen baseline of the . This is a sell signal.
9. Prices are trading below the thick red conversion line. This is a sell signal.
10. The red conversion line direction is heading lower. This is a sell signal.
11. The Ki jun-Sen baseline of the direction is heading lower. This is a sell signal.
12. The CHOP ZONE indicator (under chart) is red, indicating a down trend.
** The lower top indicator is a forward projection as follows: For an estimation of possible FORWARD TRENDING I use the Senkou Span A (Leading Span A): (Conversion Line + Base Line)/2)). This is the midpoint between the Conversion Line and the Base Line. The Leading Span A forms one of the two Cloud boundaries. It is referred to as "Leading" because it is plotted 26 periods in the future and forms the faster Cloud boundary. I then make an oscillator out of this and plot the progress up and down around a “zero line”.
I HAVE THE RESULTS OF THESE CALCULATIONS FOR-IWM IN THE TOP LOWER INDICATOR. IT IS VERY NEGATIVE.
As I write this the are strong, indicating an up day. But don't be fooled.
Between the-SPY and-IWM you have 2,500 picks. Yet most money managers and hedge fund managers are down for the year.
I feel we have the setup for an-IWM market decline. To be fore-warned is to be fore-armed.
I hope that all of your trades go well. Don.