IWM Megaphone in Megaphone Scenarios
ARCA:IWM has a mandatory retrace to its pink topping megaphone VWAP at 112 to carry out, and it will probably continue through that level to the pink megaphone bottom below 100.
But it has reached a point within its navy blue interior topping megaphone, where it could reverse for one last trip to that megaphone’s VWAP or even its top before completing the retrace to 112 or trip to the pink megaphone bottom.
In other words, the easy money in the trip down from the high has already been made.
A downward breakout from a topping pattern at the navy blue megaphone VWAP at 123.55 would be a fresh set-up to short to the pink megaphone bottom below 100. A breakout upwards through 123.55 would be a set-up to go long to a new all-time high.
A downwards breakout from a topping pattern at a new all-time high would be a set-up to short to the pink megaphone bottom below 100.
Right now, IWM is trying to put in a little bottoming megaphone across 121. We could see a lower low within that before a retest of 123.50.