Russell 2000 Analysis for May 1, 2007
Path of least resistance: I’m tempted to say down after today’s break of the up trendline. However, the IWM made a new 52-week high only two days ago, so it is difficult to say.
Major Price Points: The $80 area is support from the 50-day moving average and the April 11th & 12th lows. After today, it seems like the IWM must test this support. I would not be surprised to see it touched tomorrow.
Minor Price Points: Trading over $82.50 would show strength/indecision. $83 is a new high. The $81 area is interesting because it was strong resistance in March and the first half of April. It was also support on the April 19th low. What is interesting is that today the IWM closed right in this area.
Worth noting: The Russell 2000 is the dog of the indices, so if the market is heading down then the ER2 should have the better trades. Today was the largest volume in over a month on the IWM, which is bearish.
General Sentiment: The other indices have not yet broken their trendlines, so depite today, the trend is still up and the market is strong.
