RWM dominated by bears dragging the market lower throughout the day
ProShares Short Russell2000 (RWM) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, RWM ended the month -4.81% lower at 36.19 after losing $0.47 (-1.28%) today on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 36.49, ProShares Short confirmed its breakout through the previous session low after trading up to $0.44 below it intraday.
Daily Candlestick Chart (RWM as at Jun 30, 2020):
Tuesday's trading range has been $0.79 (2.15%), that's below the last trading month's daily average range of $1.06. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for RWM.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 36.05 earlier during the day, the ETF bounced off the key technical support level at 36.10 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on April 29th, RWM gained 3.89% on the following trading day. The market closed back below the 20-day moving average at 36.55 for the first time since June 23rd.
Although RWM is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 35.93 where further sell stops could get activated. With prices trading close to this year's low at 34.32, downside momentum might speed up should ProShares Short break out to new lows for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Its common bearish interpretation has been confirmed for ProShares Short. Out of 671 times, RWM closed lower 53.35% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 60.36% with an average market move of -0.53%.