IWM is the ETF for the Russell 2000 Index. The Russell is a leading indicator for the stock market, since speculative money tends to move in and out of small cap stocks first.
Below is a Friday’s daily chart of the IWM. Look at the beautiful parallel bullish channel that just bottomed with the recent pullback. Look at how much room to run to the upside IWM has within the channel.
Now look at the MACD histogram, which has changed direction and is moving toward the zero line.
Finally, look at the ADX momentum indicator. An imminent bullish +DI cross is occuring.
BOTTOM LINE: At least for now, the momentum remains bullish and equities should rise in the short to mid term.
