$IWM Short-term moving averages rarely cross below medium- and long-term moving averages to form a bearish divergence. The last time was around February 2025, when rising tariff uncertainty, persistent inflation, weakening consumer confidence, and concerns about an economic slowdown were the main factors. Small-cap stocks are more sensitive to interest rates and domestic demand, so they fell more sharply.
This time, too, we shouldn’t overlook the risk. If prices quickly move back above all the moving averages, that would of course be a good sign, suggesting the bearish divergence was only a temporary disturbance. If they fail to get back above them for a while, we should remain cautious.
As trend traders, it’s safer to wait until the trend signal is clear before making a move. For now, we’re still in the observation stage, so let’s be patient.
This time, too, we shouldn’t overlook the risk. If prices quickly move back above all the moving averages, that would of course be a good sign, suggesting the bearish divergence was only a temporary disturbance. If they fail to get back above them for a while, we should remain cautious.
As trend traders, it’s safer to wait until the trend signal is clear before making a move. For now, we’re still in the observation stage, so let’s be patient.