Has The Russell Small-Cap Index ETF Tricked Us?
Michele Schneider | Mar 31, 2022 12:28AM ET
Recently, we talked about the volatility fund standing its ground in price. While the market has been trending higher, the short-term volatility fund iPath® Series B S&P 500® VIX Short-Term Futures™ ETN (NYSE:VXX) was able to stay mostly over its 200-Day moving average near 24.
Then on Tuesday, many commodities rallied into the close. These were hints to be cautious as the major indices pushed higher.
Additionally, the Russell 2000 (IWM) cleared a major resistance point making it look as though the market was ready to run. While that still could be the case, IWM closing underneath its breakout level at $209 on Wednesday does not look good.
For traders heavily in equities does this mean they should reverse positions and go short? Not completely since there are still key areas to watch for support and the indices have been due for a small pullback after such a quick run-up in price.
With that said, support levels are nearby in the Dow Jones (DIA), S&P 500 (SPY), and the small-cap index (IWM).
Most of the nearest support levels come from either the 50 or 200-DMA as seen in the above charts. However, the NASDAQ 100 (QQQ) does not have much technical support until the $350 area.
While we can watch these support levels, the market is in a tricky spot. We are sitting on the edge of looking for continuation higher as well as potentially falling back into the lower trading range.
Therefore, place trades carefully or watch for more clarity from these support and resistance areas based on the major moving averages.
h2 ETF Summary/h2- S&P 500 (SPY) 447 support.
- Russell 2000 (IWM) 209 pivotal.
- Dow (DIA) 350 support to hold.
- NASDAQ (QQQ) Could not hold the 200-DMA at 368.83.
- KRE (Regional Banks) With such a large selloff, watch for a close under the 200-DMA.
- SMH (Semiconductors) 268 support.
- IYT (Transportation) Flirting with 274 the 200-DMA.
- IBB (Biotechnology) 127.67 the 50-DMA support.
- XRT (Retail) 78.06 to hold from the 50-DMA.
- GLD (Gold) 180.63 the 10-DMA to clear.
- USO (Oil) Flirting with the 10-DMA at 77.74.
- DBA (Agriculture) 22.30 resistance area.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.