The big news last week was that IWM(Russell 2000 ishare etf) is back above resistance and small-caps are showing some leadership. IWM broke above consolidation resistance at 83 on Tuesday and closed above this level the last three days. The move signals a continuation of the Mar-Apr advance and the next upside target is around 88. The March-April advance was roughly eight points and a similar advance from the May low at 80 would extend to around 88.
The breakout is bullish until proven otherwise and there are two levels to watch for signs of trouble. First, the resistance break at 83 turns into support. This is at least the third breakout attempt and a strong ETF should hold its breakout. A move back below 83 would be negative. Second, IWM should hold key support at 81.5. The March trendline, 50-day SMA and late May low all converge to mark support here. A break below 81.5 would represent a total failure and reverse the medium-term uptrend.
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