Understanding where weakness and strength are coming from is often a critical component in analyzing the stock market. Right now it looks like Small Caps are one of the ugliest pigs in the pin. On its face value, the Russell 2000 iShares ETF ($IWM), looks fine: It’s near its all-time high, in a clear up trend and above its major moving averages. It’s when we look under the hood of the car that we can see what’s going on with the Small Caps.
The chart I’ll be talking about today is a weekly chart $IWM going back to 2007.
I’m going this far back to show past examples and compare them to today of when Small Caps have come under fire. Looking at the peak in 2007 we can see that $IWM created a double top at $77.50, very similar to what happened in 2011 and the current price action.
In this piece I continue to discuss the other similarities between the 2007 and 2011 high compared to the current price action.
To see the chart and to keep reading: Will Small Caps Continue To Weaken? (See It Market)
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