Keep a Proper Distance

While there are plenty of headlines to harp on regarding the recent market price swings and general volatility, a recurring visual motif on this website and for Members has been the weekly chart for the small cap-dominated IWM, ETF for the Russell 2000 Index. 

Specifically, the significance of the two-year (plus) support trendline which has been guiding price higher since early-2016, highlighted below on the IWM weekly timeframe, seems to be a focal point. 

While the small caps still remain clearly above their early-February lows of $142.50, price is "leaning down" a bit too much for comfort on that support trend. As they say, the more support is probed the more that prior support tends to lose its luster, becoming more vulnerable with each tepid bounce. Bulls, instead, would prefer to see price sharply bounce off trend and then keep a proper distance away from it, or at least firm up on it for a reasonable period of time before, again, bouncing up and off it with conviction. 

At the moment, the reason why we are returning to this look is due to the precarious position bulls figure to be in after yesterday's selloff followed-up by this morning's uninspiring bounce, thus far. A bullish scenario would see this morning fade serve as a trap to lure in shorts before we squeeze higher the rest of the session. 

However, at the moment we have modest bounces in the likes of oversold TSLA and AMZN is back to red. The air also seems to be out of the crypto-related trade, with LFIN and OSTK still moving lower.

Finally, regarding precious metals and miners I see GLD (gold metal ETF) is backing and filling to its 50-day moving average. I suspect this will prove to be an excellent test of mettle as to whether gold bugs are for real this time--Defending this early weakness seems like something they simply must do if they have bullish aspirations this spring.