$IWM - How GILD may have saved the market (for now)

Those who follow me know I have been bearish (and still am in the long term) since January. However looking at the IWM which has been a very good leading indicator of the market overall, the Gild news could have breathed a new lease of life to the market.

Looking at the actions a few days before the GILD news we can see that the IWM was rejected twice and closed below the resistance line.

In addition there was a bearish RSI divergence prior to the news. As a result, I think we could be headed higher now if we are able to break above the resistance line after bouncing off support. (If we are unable to break that resistance and fall below the current support then it could be game on for the shorts)

Also looking at the RSI in general, for now we are still following the trend line and still haven't gotten back to the 50% line, this may mean the rest of the market may be heading higher with minor pull backs.

With everything happening in the world one would expect that the stock market should be crashing but The Fed has been injecting so much liquidity into the market. We have to take the stock market one day at a time and deal with what it gives us.

Also there is too much negativity in the market right now and it shouldn't take much for the FED to get the market to move higher if and when it starts to buy ETFs since that could cause a short squeeze and take markets to higher highs.

Please do your DD before investing as this is just my opinion.