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FLASH INTRADAY: Why IWM and $220.93 level might be biggest clue to equity market direction next few days

STRATEGY: Why IWM $220.93 might be the key level to watch for market direction
On 3/23, we wrote about how we believed the Russell 2000 (better proxy is IWM ETF) made an important low and this was important for future overall equity market direction. We use the IWM because it is the ETF tracking the Russell 2000 and is updated more often than the R2K index.

IWM make a brief dive lower on 3/25/2021, but that could have been the early sign of the massive leveraged trade unwind by the 6 prime brokers.  But since that 3/23 low, the IWM (Russell 2000) has been clawing its way back.

At this moment, we believe IWM is actually a leading indicator index for overall market direction.  Why?

- Foremost, it is the best performing major index YTD, up 13%
- Second, it is chocked full of Epicenter/Cyclicals, which is the best barometer of the economic re-opening.

IWM has been a bit heavy lately, the index peaked on 3/16/2021 and while it looks like it bottomed last week, it has yet to re-attain an all-time high.  Thus, it sort of raises the question about the health of the re-opening.

This is why IWM $220.93 might be the most important level for markets.

Why IWM $220.93 matters...
Take a look at the 30 minute IWM chart below.  There are some key points marked:

- TD Buy countdowns of "13" (key) and "9" (good) in place
- 200-day moving average is $220.82
- Resistance ST is $220.93, the high from two days ago

Thus, you can see that $220.93 is a key level and once a close above $220.93 take place, the next key level is the all-time high of $235.  There is a minor "gap" to be filled at $225, so that could be a "magnet" once above $220.93




Bottom line: Watch IWM... might be key to market direction
In short, what IWM over next two days.  Since it is the most-epicenter filled index, this might be the most indicative of market direction.

- best case is a close above 220.93
- ideally today or Thursday
- not terrible, if it happens in the next 5 days

The future is uncertain, but I don't think it is an "if" question but a "when" question.   But I am only guessing.  Seriously, the future is uncertain.

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