Russell 2000 ($IWM) Breakout

Friday left the Russell 2000 ($IWM) primed for a breakout and Monday delivered on that setup. By the close of business, the Russell 2000 was left with a bullish "three white soldiers" setup and the potential for more upside. So while the Nasdaq and S&P are near market "extreme" tops, the Russell 2000 is still trading well within itself. Technicals for the Russell 2000 ($IWM) are net bullish and improving, but Monday's volume didn't register as accumulation.

The Nasdaq eased off its high, but the losses didn't do a whole lot of technical damage. It has been a number of months since the index last tested its 50-day MA, so if the selling was to continue then I would be looking at a test of this moving average.

The S&P finished with a doji like the Nasdaq. What applies to the Nasdaq also applies to the S&P.

After today's action indices have shown their hand. We have bearish doji in the Nasdaq and S&P that should deliver lower prices in the coming days, but the Russell 2000 ($IWM) may pause tomorrow, but I would be looking for gains to resume.


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Investments are held in a pension fund on a buy-and-hold strategy.

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