12.28.14 “Russell 2000 Might be the Key for 2015 — IWM RUT (PART 1)”
The Russell has been strong since the late-2014 as it had repudiated potential market-topping pattern that was formed in the entire year of 2014. Ever since then it has been faithfully cultivating and establishing intermediate and primary-term uptrend. We have been long on the Russell since $119ish, and we have been calmly holding. As the Russell makes new all-time-high, I believe it will continue to be in an intermediate to primary-term uptrend.
In this post I want to share with you several charts that supports that we are still in an uptrend and likely to continue in that fashion towards end of the year.
IWM Daily Chart
Since the late-December and early-February (see previous article), we have been holding call-positions since $119ish. In late-April, we did see a pullback but that didn’t cause us to act emotionally (or panic) as we stayed calm and realized we were still in the vicinity of intermediate-term higher-low. Since then the Russell (IWM) continued on seeing strength moving higher, even, with weakness on the S&P 500 (SPX) in late-May and early-June. With today’s new all-time-high record, it is just confirming that we are still cultivating and maintaining primary-term uptrend. As a trader/investor, that’s what we do, we respect the uptrend and we ride the uptrend.
IWM Daily Charts with 100-Day MA
We can clear see in these ‘before and after’ pictures that we are continuing to cultivate primary-term higher-lows, and sometimes that’s as simple as it’s going to get to understand the primary-term uptrend. The pullback will occur but that pullback is merely the market cultivating that higher-low before continuing/resuming it’s move. The good news about the Russell is that, after bottoming on mid-October of 2014, we are now just started forming another primary-term uptrend that could continue on 2-3 years. As long as they continue to establish and cultivate the primary-term uptrend, we will stay bullish on the market.
Russel 2000 Index (RUT) Monthly Chart with 20-Day MA
This analysis was done in the Part 1 but still very much viable today.
[quote]Going back all the way to 1990s, we can see that monthly-20SMA has been a big deal when it is trading in a prolonged/aged/seasoned primary uptrend. Recently, we bounced off of monthly-20SMA and moving higher. History and probability suggests that the Russell 2000 is likely to continue higher in the year of 2015.[/quote]