iShares Russell 2000
The small cap universe,
as a whole, has actually been on a southerly slide the last five trading sessions.
Is this move a cause for concern or is it a healthy correction in an up trending
market? Currently I’m in the healthy correction camp. Based on our Fibonacci
work, the iShares Russell 2000 Exchange Traded Fund (IWM) is sitting on key
price support from 99.09-100.62. Not only do we have price support, but our
time parameters are calling for a potential cycle low between April 24 and April
25. Plus, the previous two corrections have lasted six days and five days respectively.
Today, (IWM) gapped down into our support zone and reversed direction early
in today’s session. So, with these price and time parameters, I’m looking for
opportunities to join Russell and his 2000 friends on this northbound party.
However, this party will come to an abrupt halt if (IWM) trades down through
our price support zone and continues down through our time parameters. This
would signal, at the least, that a deeper correction is in order, and the April
17 high is much more pivotal. If I do get a trigger to enter long, then my stop
will be just under this price support zone at 99.05.
