Want to see an interesting chart? Of course you do! Why else would you be here?
Below is the /RTY from the point when the U.S. surrendered to China (left side) leading to an historic and explosive rally on Monday. Fast-forward to today, and what do we see? A return to the same price BEFORE the announcement early on Monday.
Process that for a moment! The entirety of the post-announcement mega-rally has been laid waste, and it only took a few days.
On a much larger time scale, the Fibonacci on the /RTY remains pitch-perfect. We’ve got a fairly well-defined topping pattern (green tint) followed by a plunge to a supporting Fib (green line) which in turn was followed by an insane rally to, yep, the blue Fib, except this time it is acting as resistance instead of support.
All of which leads me to say I’m very comfortable with the IWM being far and away my largest short position. My hope is that we play out something roughly similar to what we saw with the topping pattern hammered out in 2021.
I have ramped up to 25 short positions and am going to spend the next hour reviewing each one and tightening up stops across the board.
