February 8, 2012
Shares of the small cap ETF Ishares Russell 2000 Fund (NYSE: IWM) are headed for a test of their prior highs.
The $85-$86 level has stopped IWM back in 2007 as well as in 2011. The most recent closing high, at $82.95, reached on Friday, February 3, takes the index within just a few percent of these levels.
Though one might be tempted to look for another leg down here, the major indexes have been consolidating for the last half of 2011 and have only just started to march higher again. The Nasdaq has already broken to new highs and we are looking for IWM to do the same.
Although many look at IWM as being dominated by individual investors, our experience tells us that strength in this index tends to lead the stock market higher.
A decisive close above $86.39 would be extremely bullish and point to a new leg higher.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in the Ishares Russell 2000 Fund.
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