Today’s Chart of the Day was shared by Brian Shannon (@alphatrends). Small-Caps are staring into the abyss as we head into the weekend, with the Russell 2000 ($IWM) closing at a three-year low. It’s down -33% from its November 2021 peak and lost a crucial support level this week, around $163. This level coincides with the 2022 lows, and the VWAP anchored to the 2016 low (blue). Not only has $IWM given up all of its post-election gains, but also, the average buyer since the 2016 lows is now underwater. The fact that Small-Caps couldn’t hold such a pivotal level sets an ominous tone for the broader market. Brian points out that it’s common to see price overshoot a key support level before a significant upside reversal. However, $IWM needs to reclaim broken support at $163 first.
Chart of the Day - Friday, October 27, 2023
October 27, 2023
