Russell 2000 ishares ETF (NYSE: IWM) Continues Steadily Higher
Shares of the Russell 2000 ishares ETF (NYSE: IWM) made a quiet new high on
Monday.
Chart Courtesy of StockCharts.com
Small stocks are moving steadily higher. This is bullish for several reasons. One is that the market has a lot of internal strength. When small stocks advance, since there are more of them, it improves the market's breadth. Good market breadth, in turn, is a sign that the advance could last for longer periods of time.
The second reason, especially in this market, is that the rally is being fueled in large part by companies buying back their own stock. Small companies tend to have less stock floating in the market than large companies.
It's not hard to see that one thing is feeding the other. If small stocks continue to move higher, the rally can last longer. At the same time, if small companies are buying back stock, prices are likely to move higher for longer period.
The end will be disastrous. It always is for a momentum market. But for now, it's a good set of developments as it means that the odds of higher prices in this rally are still pretty good.
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