In the case of the Russell 2000 ETF, $IWM, the trade stop is below $95.69, but with an ATR of 7.84 you would ideally be looking at a stop closer to $83s to allow for volatility - making the typical risk:reward worthless. So, with that caveat, buyers want to be close to the exit button.
The Nasdaq low of 6,631 is where risk:reward is measured; again, an ATR of 433, rules out the volatility driven stop but prices are congesting in the 6,650 and 7,350 zone.
The S&P shed nearly 3% which dropped the index out of last week's prior congestion. As with the Nasdaq and Russell 2000, trading volume was lighter than Friday's.
Nasdaq bullish percents continue to shape a bottom which is another tick in the swing low development for the parent Nasdaq.
Also, the Percentage of Nasdaq Stocks above the 50-day MA has seen a 'buy' trigger in the MACD and CCI.
For tomorrow, look to the Nasdaq to continue its recovery - and from that - the Russell 2000 too. Traders may wish to wait for the first 30 minutes of trading to establish a range, then buy a break of that range should it move higher.
You've now read my opinion, next read Douglas' blog.
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