Block Money Flow in Small Cap ETF Signaling Further Strength Ahead? (IWM)

Although the iShares Russell 2000 Index Fund (IWM) is not far off 6-month lows (after hitting new highs in May), block money flow -- a gauge of net institutional buying and selling activity -- has been rising sharply.

Along with other data indicating that bearish sentiment has hit a contrarian extreme, the divergence suggests that last week's strong rebound could be the start of something bigger (click to enlarge):

Comments

[JonD:]

Or, you might say that IWM is down despite strong support from big institutions. what happens if/when they stop buying? wouldn't IWM go down further?

that's the beauty of technical analysis - two people can draw totally different conclusions from the same chart.

2006 Jun 21 10:12 AM