Thus far, the iShares Russell 2000 Small-Cap ETF (IWM) has retraced 62% of its prior upmove from 68.16 to 72.27. Although the intensity of the sell-off is pressing the hourly RSI into oversold territory, my sense from the way the pattern is unfolding is that the IWM will test the March-April support line, now in the vicinity of 69.40/35 -- prior to my expectation of a potent upside pivot reversal that initiates a new upleg.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.