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The “Power of the Pattern” suggested last week that Basic Materials ETF (IYM) was on Right shoulder support and that a quick 10% rally could take place. (see post here)
Last summer IYM looks to have created a “Bullish Head & Shoulders” pattern and once it cleared flag/pennant resistance line (1) a quality breakout rally (30%+ gain in a few months) took place. IYM looks to be creating a similar pattern and is now testing the flag/pennant resistance, similar to last summers pattern. Basic Materials/IYM continues to be a key Macro ETF to watch. An upside breakout in IYM should be very good for this ETF and a good sign for the broad market, as it was on the breakout last fall.