Purely hypothetical, but there could be a "Double Trouble" (one H&S on top of another) setup in IWM. Note the open gaps shaded in grey boxes. (Disclaimer - I am short IWM via Puts. Not a recommendation, just an observation! Thanks Kirk for the phrase "Double Trouble" used in the title of this post.)
Comments
imdp
⋅
Hey David, yeah I agree. Just a hypothetical and one that will likely take many months to play out should it prove true. There's reason to expect the Russel 2000 would be weaker than SPX or DJIA, but I don't know if it'd be this much weaker. I'm short IWM expecting an eventual test of 89.5 - which at this time seems it will be difficult to accomplish. I don't want anyone to expect this illustration will play out, just noting the super-bear case. What's funny is that I don't feel like we should be expecting an imminent breakdown like in '08-'09, but I'm seeing the potential for a major breakdown more often in the major indices. Must be a few major catalysts on the horizon most of us are unaware of. Thanks for the comment, David.
davidbosworth
⋅
Not gonna be going down like that without the Dow/S&P doing pretty much the same thing. Maybe its just that you've got it how it would probably happen, and how the technicals could be described, were the economy ready right now to begin another serious breakdown as in 2008-09.