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Russell 2000: Pre-Market Is Testing The Down-Trend

|Includes: iShares Russell 2000 ETF (IWM)

Can the iShares Russell 2000 ETF (NYSEARCA:IWM) open higher and still be in a down-trend?

The short answer is yes...........but it can't go too far or the channel line will be penetrated.

Looking at the Daily chart of the IWM, I have indicated where the current pre-market activity is taking place.

Looks like if we exceed the 112.65 - 112.75 level, then the channel is being penetrated.

If that happens, an exit might be considered.

This particular down-move has been in effect for five-weeks and is well along in its trend. This type of whipsaw behavior is typical.

IWM Pre-market

Chart by TeleChart

As a side note, under current conditions the position might be exited, but I am not going long. We still have an out-side down monthly reversal. The monthly and weekly momentum indicators are both pointing down........this does not support a case for going long.

Disclosure: The author is long TZA.

Additional disclosure: Illustration only. Not investment advice