Small Caps Setup A Very Rare & Interesting Price Pattern

Our researchers have identified a very rare type of price pattern that is typically associated with explosive trend changes and trends.  We call this type of pattern a “Sandwich” pattern because of how price reacts within a range.  The IWM, Russell 2000 ETF, is illustrating a nearly perfect example of this pattern right now.

Daily IWM chart (Russell 2000 Small Cap Index)

This close up view of the Daily IWM chart highlights the Sandwich pattern over the most recent 5 trading days and how price enters this volatile period, rotates around within a range, then settles near the upper or lower end of the range before a price breakout occurs.  Notice the earlier Sandwich pattern setup and how price settled near the bottom of the range before a downside price leg pushed the price much lower.

It is our belief that the IWM could be setting up for a significant reversal or breakout based on this Sandwich pattern os be ready for an extended move.

Longer-term View of the Daily IWM chart

Here is a longer-term Daily IWM chart that highlights previous Sandwich patterns for you to review. We go into more detail and a very interesting setup in the IWM and transportation index that took place in 2008, same set up we see now.

One thing to understand about the Sandwich pattern is that it is an early warning sign that price has reached an inflection point and will likely attempt to break out or reverse down from the ranges set up within the Sandwich pattern.

Also, you can see from the examples, above, that these patterns can take many bars to form and are sometimes somewhat convoluted in structure.  The most recent Sandwich pattern is unique because it is very defined over the past 5+ days.  We believe an upside price pop to the upside could turn into a “washout high” price setup.

Compare this price activity to the SPY chart and you’ll see that the IWM, Small Caps, are operating as a leading price indicator for the potential breakout/breakdown move that may happen in the immediate future.  We see similar types of price rotation, but nothing as clear as we see on the IWM chart.

The fed news is shaking things up and our analysis stats this month could be the market top. We expect Aug 19th-ish… but this month is the window we feel it may happen. Stay tuned to our research – this is going to be fun to trade.

WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell.

I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here.

On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis.

More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part.