March 2006, Volume 3 Issue 3 Know It - Profit!
"Russell 2000 Conquers All...
Get Your iShare Of The Profits!"
The Russell 2000 shows no signs of letting-up. Is now the time to take advantage of an exchange traded fund (ETF)?
Also... gold, oil and steel continue to be strong players. Look for outstanding trades in these markets.
But first, let's see which indices are doing worse than your savings account...
The Russell 2000 (^RUT) continues to make solid gains... up 8.25% year-to-date..
The Nasdaq Composite (^IXIC), Dow Jones Industrials (^DJI), Standard & Poor's 500 (^GSPC) and Wilshire 5000 have barely eked-out a 2% gain year-to-date.
Your money market account never looked so good!
Where is the S&P 500 going next?
It's our featured index in Market Metrics...Click Here For Broad Market Analysis
This month, the AMEX Gold Bugs Index (^HUI) is shining... up 11.7% year-to-date.
The PHLX SIG Steel Producers Index (^STQ) continues to prove its mettle... up an impressive 22.8% year-to-date.
PHLX Oil Service Sector (^OSX), AMEX Disk Drive Index (^DDX) and PHLX Semiconductor Capital Equipment Index (^SEZ) are making steady progress with 5.7%, 11.4% and 19.3% gains, respectively.
Will these leaders continue their steady growth? Or, are they due for that inevitable correction?
Go to Market Metrics for the latest...Click Here For More Stock Sectors
When a broad market index consistently out-performs like the Russell 2000 has, consider trading its ETF.
This month, we look at the iShares Russell 2000 (IWM)...
View Current Chart of IWM
On the weekly chart, IWM
is trading well above its moving average channel...
signaling a strong trending market
with more room to grow.
Also, the Commodity Channel Index (CCI) reflects the strength of the move by remaining solidly above the zero line. However, a minor divergence may be forecasting the beginning of a corrective pause.
Recently, IWM reached a Wave 3 target area. After some consolidation, expect a run up to the Wave 5 target area of $79 to $82.
The ETF is a great way to take advantage of a strong market or sector.
Use it wisely!
And... always, diversify your portfolio -- reducing risk to a manageable level.
Until next time...
Russ Schmidt, President
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It should not be assumed the technical indicators, analysis techniques or trading methods presented in this newsletter will be profitable or that trading decisions based on their use will not result in losses. Past results are not necessarily indicative of future results. Examples presented in this newsletter are for educational purposes only. Any trade set-up illustrated is not a solicitation to buy or sell a security. The author, publisher and any affiliate linked to this newsletter assume no responsibility for your trading results. Remember... there is a high degree of risk in trading.
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CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
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