Russell 2000 Traders, Read This

  • February 22, 2005
  • Derrick Hobbs

I’m
looking at the iShares Russell 2000 Index (IWM), and projecting price
to fall into the price zone from 113 to 117. My reasoning:

First, based on the heavy
selling today, we are headed down out of a swing high point I labeled ( C ).
This is the 3rd of 4 swing points to complete an AB = CD pattern that
should wrap up in the zone mentioned above from 113 to 117.

Second, the 50% retracement of
the August 13, 2004 low to the December 31, 2004 high is in this same price
support zone.

Third, check out the correction
from July to August of last year. It lasted 30 days and was 15 points or 13% in
size. A similar price correction would put the iShares Russell 2000 down around
116 to 117 based on the December 31 high of 130.

So, it doesn’t look like buying
opportunities are going to present themselves for a few sessions. Be patient you
market buyers! Your time will come again, just not right now.

Until next time!

Derrik