Good afternoon, folks!

There are two tickers that I will pay special attention to this week.

IWM & DIA

These aren’t as popular as the S&P and the Nasdaq; however, these indices can be quite telling for the overall direction of the market.

Let’s look at IWM first.

Looking at this daily chart, there’s a couple of things going on here.

On Friday, IWM traded right into the daily supply zone from mid-September.

Supply and Demand zones are simply areas of interest where orders that were once unfilled may become filled again.

In September, IWM traded into this 188-189 area and led to a 5% sell-off in just two sessions. You can see that the bears didn’t stop there as they continued to sell throughout the remainder of September.

On Friday, IWM closed with a shooting star candlestick pattern.

Let’s take a look at the Dow Jones

A Similar setup here.

DIA closed Friday with a hanging man candlestick pattern.

The hanging man needs a gap down the following day which we got today on DIA.

DIA did rally intraday but only right into another supply zone.

Right now, DIA is trading above its all-time high trendline for the first time in 2022.

Be mindful of a false breakout here on DIA.

If DIA closes back below 330, then it presents quite a bearish landscape for Dow names.

Tomorrow morning we have more macro data coming in, PPI print.

A lot can change the current landscape between now and tomorrow’s opening bell.

If bulls step in and bid the market tomorrow with a close above today’s high on both IWM and DIA, then the short setup will be invalidated and bulls may retake momentum.

Enjoy your week this week!

–Dylan

(Head Analyst)