Cracking The Triangle In The Russell 2000

Is today the day? Since the end of January the stock market has been winding in a roller coaster like fashion, up and down in violent swings. Digging deeper though, with each swing the moves have been a bit more muted. Although the day to day picture has caused much pain the bigger picture has shown a series of higher lows and lower highs.

The chart below illustrates the path using the Russell 200 ETF, $IWM. The drop from the January high to the early February low at the 200 day SMA. The 2 stage bounce to the early March high and then pullback to the 200 day SMA again at the end of the month. Then another 2 step move to the upside. Friday will start with the IWM at the top of a 3 1/2 month long symmetrical triangle.

It is also the 5th touch at the triangle. This is often when a break out occurs. But it is also only about 1/3 of the way through triangle. The most powerful moves tend to happen a bit further into the apex of the triangle. This current move seems to be strong and have momentum building behind it. A break out and continuation higher would give a target to 174.50 in the IWM. Will this be the time?

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