iShares Russell 2000 ETF (IWM) Stock News and Forecast: Why is the IWM still going up?
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFER- SPY was helped on Wednesday by inflation data.
- US CPI was in line with economists' expectations.
- IWM stuck in a range trade.
Another day another all-time high for the SPY on Wednesday as the US CPI data was in line with expectations and so not too shocking to equity traders. We had called this one higher so were caught off guard by the in-line print. The inflation data is still high and getting higher but not yet high enough to cause the sell-off that many have been anticipating. Recent CFTC data shows shorts getting squeezed and covering futures positions in the S&P 500, while fund managers have also reduced long positions. The longer this grind higher continues, the more likely we are to eventually see a more significant bust. For now, price is the ultimate indicator as we say, and that is still guiding us higher. The US 10-year yield has refused to budge following the CPI data on Wednesday, meaning the bond market may be preparing itself for a showdown with the Fed. However, the Put/Call Ratio continues to move higher as more and more participants become convinced of the market being too high and ready for a correction. This would signal to us that this grind has more room to go yet. If the majority are bearish and the market keeps going up, then that draws its own conclusions. Once the bearish masses have bailed and covered shorts is when this SPY is more likely to turn over.
SPY stock forecast
We realize we are flip-flopping our bearish call from yesterday, but being in the market means changing your mind and being flexible. You have to be able to go with the flow and flip sides from time to time. We expect the grind to continue and frustrate the bearish masses for a little while longer. The momentum indicators are providing warnings signs with bearish divergences across the Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI) and Commodty Channel Index (CCI), so use careful risk management. $441.31 is the key to hold the bullish move.
Our levels from yesterday still hold, short-term support at $441.31 as mentioned. If this were to break, there is a small support zone at $423 with the volume profile lending support here. The prefered buying point though is at $414.70. This may seem like a strong call, nearly 10%, but it only brings us back to where the SPY was trading in July. The volume profile is at its strongest here, so this level needs to hold. A break could be sharp, as volume dries up worryingly until $390.
Short term we see more bears being frustrated by the grind higher, but in the medium term be prepared for a sell-off. Breaking $441 would be the current signal for this.
IWM stock forecast
A quick look over at the broader Russell 2000 (IWM) shows it is still stuck in a range and looking to break out. Watch this one for a possible leading indicator.
The RSI is gaining strength and trending higher, and IWM is above the 9 and 21-day moving averages, hence it is skewed more to the upside.
Like this article? Help us with some feedback by answering this survey:
- SPY was helped on Wednesday by inflation data.
- US CPI was in line with economists' expectations.
- IWM stuck in a range trade.
Another day another all-time high for the SPY on Wednesday as the US CPI data was in line with expectations and so not too shocking to equity traders. We had called this one higher so were caught off guard by the in-line print. The inflation data is still high and getting higher but not yet high enough to cause the sell-off that many have been anticipating. Recent CFTC data shows shorts getting squeezed and covering futures positions in the S&P 500, while fund managers have also reduced long positions. The longer this grind higher continues, the more likely we are to eventually see a more significant bust. For now, price is the ultimate indicator as we say, and that is still guiding us higher. The US 10-year yield has refused to budge following the CPI data on Wednesday, meaning the bond market may be preparing itself for a showdown with the Fed. However, the Put/Call Ratio continues to move higher as more and more participants become convinced of the market being too high and ready for a correction. This would signal to us that this grind has more room to go yet. If the majority are bearish and the market keeps going up, then that draws its own conclusions. Once the bearish masses have bailed and covered shorts is when this SPY is more likely to turn over.
SPY stock forecast
We realize we are flip-flopping our bearish call from yesterday, but being in the market means changing your mind and being flexible. You have to be able to go with the flow and flip sides from time to time. We expect the grind to continue and frustrate the bearish masses for a little while longer. The momentum indicators are providing warnings signs with bearish divergences across the Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI) and Commodty Channel Index (CCI), so use careful risk management. $441.31 is the key to hold the bullish move.
Our levels from yesterday still hold, short-term support at $441.31 as mentioned. If this were to break, there is a small support zone at $423 with the volume profile lending support here. The prefered buying point though is at $414.70. This may seem like a strong call, nearly 10%, but it only brings us back to where the SPY was trading in July. The volume profile is at its strongest here, so this level needs to hold. A break could be sharp, as volume dries up worryingly until $390.
Short term we see more bears being frustrated by the grind higher, but in the medium term be prepared for a sell-off. Breaking $441 would be the current signal for this.
IWM stock forecast
A quick look over at the broader Russell 2000 (IWM) shows it is still stuck in a range and looking to break out. Watch this one for a possible leading indicator.
The RSI is gaining strength and trending higher, and IWM is above the 9 and 21-day moving averages, hence it is skewed more to the upside.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.