July 8, 2010
Shares of the ISHARES Russell 2000 Index Fund ETF (NYSE: IWM) rose some 3% in Wednesday’s strong stock market rally.
But while they performed well this day, they were unable to close higher than the prior day’s intra-day highs. If this was a breakout rally from the long correction, it lacked a breakout.
Add to this the poor performance on Tuesday, July 6 when the stock market closed with a gain and IWM closed deeply in the red, IWM is underperforming.
IWM has declined 21% from peak to trough in this correction which puts it in bear market territory, at least for the small cap sector.
IWM remains below its 50-day moving average as well as its 200-day moving average. We would be hesitant to consider a bullish trade in this ETF until IWM closes above that 200-day average currently at $63.81.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in ISHARES Russell 2000.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy holds a position in ISHARES Russell 2000.