Russell 2000: Small Caps Eye Momentum as Risk Stays Low
2025.01.22 04:29
On December 18th, 2024, the Small Caps as seen through the lens of our Granddad (), crashed.
Why?
Mainly due to the ’s hawkish rate cut and talk of maybe only 2 rate cuts in 2025.
IWM is extremely interest rate-sensitive.
However, from a technical viewpoint, IWM tested major support on both the weekly and daily chart timeframes.
Weekly, the price tested and held the 50-week moving average.
On the Daily chart, IWM tested and held the 200-DMA. 
That low was established on January 13th and has become the low for the January 6-month calendar range reset.
Now, IWM clears the January 6-month calendar range high, which we have been talking about incessantly as the great buy opportunity once an instrument clears it.
So, what is next?
I ended with the weekend Daily discussing that the calendar range also offers a minimal amount or risk if trading or investing.
Using the low of Tuesday the 21st, $226.99 or just below the extremely pivotal $227 now should hold.
Plus, IWM still needs to clear the 50-DMA just overhead at $230.60.
Nonetheless, we see the calendar range breakout more significant right now.
Leadership or our Triple Play indicator supports the breakout.
Momentum has yet to take off, so we prefer a tighter risk out of the gate.
Incidentally, this is how one should analyze any instrument at this time of the year.
Remember, the odds of a follow-through is high, and the risk is nominal.
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
- S&P 500 (SPY) 599.70 now must hold
- Russell 2000 (IWM) 227 now must hold
- Dow (DIA) 433.38 now must hold
- Nasdaq (QQQ) Still has not cleared the January calendar range high
- Regional banks (KRE) A move over 64.25 compelling
- Semiconductors (SMH) 260 now support as this finally edges past the calendar range high
- Transportation (IYT) 71.16 important to hold
- Biotechnology (IBB) 137 key to clear for a further rally
- Retail (XRT) Better but not convincing yet-81 must clear 78 must hold
- iShares iBoxx Hi Yd Cor Bond ETF (HYG) Junk bonds super happy
