Russell 2000 created one of the largest/bearish wicks in years last week (see post here) This wick was up against falling resistance, which was a great place to score on defense in the Russell, by picking up RWM.
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Was this single day pattern important? Yes…as the Russell 2000 fell over 12% following this pattern, which also means RWM made 12%. Last week I shared that more often than not, a single day pattern isn’t that big of a deal, yet I highlighted this wick and bought RWM due to how key it could be.
In falling markets, if you are willing to score on defense, you want to go short/look to score on defense into rallies and this was a prime spot. Historically making 10% a year is the average return on stocks…keep these opportunities in mind, because RWM made 12% in a week.
Keep a close eye on the resistance at (2) in the above chart…it very well could create another opportunity!