The $94 level on the IWM, ETF for the small cap-dominated Russell 2000 Index, continues to be a critical price area. We have looked at it many times over the past month or so. And that theme of it being a significant level is proving true again today.
After this morning’s early pop, the IWM settled back down just below $94. Given that the small caps are so high beta, and often a sign of risk appetite, on its face you would think bulls need to clear this level.
But by now we know we are dealing with a mature rally becoming increasingly selective. We could easily see continued rotations away from the leading small caps down to other areas of the market. Thus, having that open mind to these possibilities is key.
Still, the main thing bulls need to avoid is seeing a forceful rejection down away form $94 today and beyond. Should that happen, it would be a far more ominous for the broad market than merely grinding at this level.
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