Did You Capitalize On IWM's Outperformance This Week?
by Mike Paulenoff
July 18, 2020 • 1:00 AM EDT
In his Trading Room a week ago Friday, Mike Paulenoff mused about whether traders would start to bid up the lagging IWM (Russell 2000 Small Cap ETF) like they were doing Big Tech.
He wrote, "It seems to me that as long as support between 137 and 132.30 contains any forthcoming weakness, just maybe it is positioning itself for a run? In the event ES takes out 3174-3184 into the closing bell -- won't 'they' be coming for the Small Caps too?"
At the time, IWM was trading at 141.30, but went on to rally this week (after dipping but holding above MIke's designated key support zone). It closed the week at 146.59, up 3.7% from his prior Friday post.
Where is IWM headed next, and how will it perform relative to the SPY and QQQ?
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Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
markets, plus key ETF component stocks in sectors like technology, mining, and banking.
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More Top Calls From Mike
This past Tuesday, January 18, Mike Paulenoff alerted MPTrader subscribers to a developing breakdown in the Russell 2000 Small Cap ETF (IWM).
Mike noted that his Point & Figure chart exhibited an ominous topping formation that threatened to send the IWM nearly 20% lower (downside target near 170) if the Small Cap ETF, which was trading at 209.39 at the time, violated its support plateau and printed 207.50.
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"My near and intermediate-term setup work is 'warning' me that finally, VALE has the right look of a pattern and momentum configuration that indicates it has put in a significant corrective low at 11.16 (11/16/21) in the aftermath of a 70% correction off of its 5/10/21 high at 23.68. Daily Momentum exhibits glaring positive divergences at every new reaction low since early October.
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Mike wrote: "Earlier this AM, Ark Funds manager and 'guru' Cathie Wood was interviewed extensively on CNBC. Notwithstanding the fact that Wood IS 'talking her book,' she is nevertheless extremely compelling and is all about 'innovation figuring out the future,' which she says in 5 years will look nothing like the present.
