The Russell 2000 ETF (NYSE:IWM) has seen a powerful move back near the highs.
The iShares Russell 2000 ( IWM) has started to diverge from the SPY.
The Nasdaq shot 3.5% higher, the small cap Russell 2000 (IWM) ETF soared 4.4%.
From the July 2009 low to the May 2010 high, IWM was up 57.4% (line 1).
Even the Midcap SPDR (MDY) and the iShares Russell 2000 (IWM) fared far better than foreign indices.
From the August low, IWM rallied for another eight months with only one lower monthly close.
During this period, IWM was up 26.6% compared to a 17.7% gain in the Spyder Trust ( SPY).
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The iShares Russell 2000 Index Fund ( IWM) was hit hard on Wednesday, falling by more than 3%.
However, small caps were hit even harder, with the iShares Russell 2000 Index ( IWM) down over 3%.
Even more impressive was the Russell 2000, as the iShares Russell 2000 Index ( IWM) was up 2.6%.
The iShares Russell 2000 Index ( IWM) regained its former uptrend, line d, over the past two days.
Combined assets of the five biggest (SPY, IVV, QQQ, VTI, IWM) run to a quarter of a trillion dollars.
The most widely held ETFs by number of funds would add in HYG, JNK and IWM.
The weekly OBV dropped below its WMA and support (line f) as IWM was breaking its corresponding support.
The iShares Russell 2000 Index Fund ( IWM) shows an impressive rally from the March lows, having gained almost 11%.
Another troubling sign was the breakdown of the Russell 2000 index ETF (IWM) from its upper channel late last week.
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The OBV was weaker than prices on the decline as it dropped below the 2010 lows while IWM did not.
From the charts it is clear that the rally in IWM lacks the impulsive nature of the action in SPY or QQQ.
The charts of the Russell (IWM), Transports (IYT) and the Homebuilders (XHB) as each has a pattern more bearish than the SPY.
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The following correction ended in August 2010, and during the next rally (line 2) IWM gained 47.6%, peaking in May 2011.
The iShares Russell 2000 ( IWM) rallied nicely from the long term 38.2% retracement resistance that goes back to the 2011 lows.
The iShares Russell 2000 Index ( IWM) has also dropped back to important support (line e), which it is trying to hold.
The OBV made a new high in April 2011, but IWM made a marginal new high in May before closing lower.
The IWM deal may help him achieve that goal sooner than planned.
The weekly chart of the iShares Russell 2000 Index ( IWM) is shown here, along with the relative performance, or RS analysis.
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As I mentioned, the IWM put options are a popular hedging vehicle, so it makes sense that these lines would move higher together.
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If the market recovery sticks, expect the more volatile but far peppier MDY and IWM to outpace the big boys in the SPY.
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Chart Analysis : The daily chart of IWM shows a well-established trading channel (lines a and b) that goes back to the October lows.
The iShares Russell 2000 Index ( IWM) closed decisively below its uptrend, line e, last week and is now down 11.2% from the September highs.
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