We’ve seen a pretty ridiculous move in small caps, as measured by the iShares Russell 2000 ETF (NYSEARCA:IWM). The Russell 2000 rally has helped to push the major stock market indices to new all-time highs… but it’s getting pretty stretched out.
Price is in desperate need of a slope reset as the trajectory is clearly unsustainable. This is another example of a headline driven move.
The Russell 2000 ETF is pretty overbought (RSI 76) and near major trendline resistance. We should see a pullback here. With chart support near the 125 level, a pullback here would setup a perfect backtest of the breakout area.
Russell 2000 ETF (IWM) Chart
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