Skip to main content

IWM not pointing the way down

The iShares Russell 2000 Index ETF (IWM) is once again below its 200-day moving average. This is the sixth time this has happened since 2004. To make matters worse, there has been a TradeRadar SELL signal generated on IWM. Other major averages and their corresponding ETFs have also fallen though not quite so far.

Should we be worried?

Currently, IWM is only about 1.3% below its 200-day MA. None of the other major averages or their corresponding ETFs are below their 200-day MA. Things look shaky but we are not getting a serious bearish confirmation from the other indexes.

This looks like more of a confirmation of what some analysts have been saying: there is a rotation out of small caps and into large-caps.

There is also a greater sensitivity to risk sweeping the markets these days. Traditionally, small caps, which make up a large part of the Russell 2000, have been regarded as inherently riskier investments than their large-cap brethren.

On the plus side, earnings season is winding down and earnings weren't too bad. As usual, companies provided conservative guidance and many managed to beat expectations.

Economic news has also been reasonably encouraging except of course in the area of real estate which is pulling the financials down with it. Inflation is under control, jobs are holding up, manufacturing is OK.

I do not believe the tough times for IWM can be considered predictive for the market as whole. IWM is not pointing the way down for the rest of the market.

Comments

Popular posts from this blog

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street profess

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing wh

Interactive Ads - Google one-ups Yahoo again

Google's ( GOOG ) press release describing the expansion of a beta program for what are being called Gadget Ads has again shown that Google is unparalleled at melding technology and advertising to benefit its bottom line. Gadget Ads are mini-web pages or "widgets" that can be embedded within publisher pages. I have written in the past on Yahoo's ( YHOO ) Smart Ads and how, by more precisely targeting site users and adjusting ad content accordingly, they provide a much desired evolution of the banner or display ad format. Though Smart Ads and Gadget Ads are not really the same, I think it is fair to say that Google has seen the challenge of Smart Ads and has chosen to leapfrog Yahoo by rolling out its own update to the display ad format. The evolution of the Gadget Ad -- One of the trends on the Internet over the last year or so involves software developers creating "widgets" which can be hosted within web pages and blogs. Widgets can be pretty much any