Dow Jones Industrial Average off more than 300 points in Thursday afternoon trading as 2016 market rout continues

Lower Prices Ahead

The IWM may have started the year strong, but look for weakness in the near term.

   

Despite green tape in Tuesday’s initial trading, a look at the Russell 2,000 ETF’s (NYSEARCA:IWM) chart pattern shows why lower prices are likely coming.

Video Transcript

Bottom line, the market looks to finally be heading lower, though we probably have a little bit of support around the $90 level on the IWM, which is still a little ways away; that would be the February lows.

Once the IWM takes out its February lows, then we’ll get into a gap area from the first of the year. Then, once we take out that, we’ll be talking about a lot lower prices.

[The iShares Russell 2,000 ETF (NYSEARCA:IWM) counts Ocwen Financial (NYSE:OCN), Axiall Corp. (NASDAQ:AXLL), Pharmacyclics (NASDAQ:PCYC), Two Harbors Investment (NYSE:TWO), Genesee & Wyoming (NYSE:GWR), CommVault Systems (NASDAQ:CVLT), Starwood Property Trust (NASDAQ:STWD), Dril-Quip (NYSE:DRQ), Alaska Air Group (NYSE:ALK) and Brunswick (NSYE:BC) among its core holdings.]

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