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September 23rd, 2014: IWM Wave Count Update

Posted by pugsma on September 23, 2014

12:00 pm EST:  The small cap stocks of the Russell-2000 and it’s proxy the IWM could hold the key to how the year 2014 will finish out.

As shown here last week (http://pugsma.com/2014/09/16/september-16th-2014-iwm-wave-count/), IWM have formed a potentially bullish contracting triangle for major [4]-P3-C1 since April 2014.   The minor E wave of major [4]-P3-C1 target of 111.51 was nearly hit this morning at 111.82.  If IWM can break above 117.80, then there is a good chance the small caps will likely make a new high above 120.97 at the triangle target of 125.35.  This will push the SPX higher to at least the 2085 target or higher.  However, if the IWM breaks below 109.86, the smalls will likely head for the 97 area pulling the SPX down towards 1800.

It’s a very critical time here in the equity markets and direction the small cap stocks take in the next week will likely decide the fate of the US Equity markets for the balance of the year 2014.   For a bullish resolution IWM needs to hold above 109.86 and the SPX needs to hold above 1978.48.  Below those key levels, I’d expect a bearish intermediate trend change.

IWM 4-hr chart (mid-day):

PUG IMW 4-hr chart MD 9-23-14

IWM daily chart (mid-day):

PUG IMW weekly chart MD 9-23-14

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