IWM - could it be a bottom?

Todays action was very interesting. The trading was heavy and widespread throughout the morning and some important technical levels were again breached to the downside - i.e. the 200day moving average in IWM and 1300 S&P futures. When things looked their darkest, the EUR was getting spanked to lows not seen since 2010, and it seemed fragile floor was close to giving way ("Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss." Wall Street, 1987) the sun started to shine again in New York and the buyers stepped up to the plate. Sure it helped that Merkel made some positive comments about saving Greece...blahblahblah.

In the end what transpired was a broad based rally that took the major indices back to their daily highs and created a buy signal in small caps. This can also be the case for the S&P but the signals line up much better in IWM.

Below is a daily chart of IWM with a stochastics indicator on the bottom. In addition to this indicator giving a buy signal - very similar in depth to the one generated nearly 1 year ago in June 2011 - there were a few other things that make todays action significant and highly likely of forming a bottom. (I say "a" bottom because it is possible the downtrend is not yet over and "the" bottom may not yet in place).

*So we have a stochastics cross higher = very bullish.
*Additionally we have the 200day moving average holding after repeated attempts which is very similar to the action from June 2011 (see green boxes) = very bullish.
*We could (I say could) have what appears to be the completion wave "c" of a minor abc correction = bullish.
*Lastly, today was a bullish engulfing candle (you can read more about that on the candlestick link i have on the right or research it on the internet - either way you should know candlestick patterns because they WILL help you trade). This should lead to an extension higher in the next few days.

I also highlighted with a red circle the ominous fact that the 50day moving average is close to crossing below the 100day moving average as it did in late June 2010. Although this eventual cross may be a few more days away, as you can see from the 2010 action the cross preceded an eventual fall but was about 3 weeks early in calling the drop. It appears that what is happening now may be similar...we can only wait and see.

Whether today or over the next few sessions, overall I see this as a tradable bottom. There are too many bullish factors to ignore. Over the course of the next 2-4 weeks expect a bounce up towards the 100day moving average near $80 (a near 7% gain) before any further hints at direction can be derived.