By now, you might have read either my or Geoff’s article on the July 6-month calendar range reset.
If not, I highly recommend you click on Geoff’s “Trades and Tutorials” above.
The chart of the Russell 2000 (IWM) shows a really wide July range.
The red line (low made the July 6th at 180.72) and the high made July 17th at 194.36, gives us a glimpse of a potential trading range.
IWM’s price rose fast in just a few short days since July 6th.
Now, as this week begins with a test of the July 6-month calendar range high, should that level break down, it could mean a substantially wide trading range in store for the small caps.
The July low is seemingly far.
Of course, should we see a pop from current levels, then we can surmise more upside with 200 the next level of chart resistance.
Since small caps are a major focus for us, we will watch these levels carefully, especially in this heavy data driven week.
We also are watching Long Bonds through TLT.
The July range here has significance in several different ways.
Put IWM and TLT together, and we will have a solid idea of the next trends.
For fun, we have included a stock. International Paper (IP) is on our list.
IP is a leading paper and packaging company that stores raw materials such as wood fibers, pulp, and recycled materials for paper production.
The stock surfaced for us when we researched companies that store raw materials as part of our inflation round 2 narrative.
IP stopped right at the 6-month calendar range high. Now in a Recuperation phase (over the 50-DMA), we find the current price compelling.
We show you this so you can see the power of combining trends, phases, chart patterns, and calendar ranges.
Next, if IP sets up, we will ascertain risk, profit targets and position sizing.
IP is a stock Mish talks about in this week’s edition of Business First AM with Angela Miles.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
