Swing Trading Uncle Russ: Sit and Wait – Michael Arold (IWM, TNA)

Michael AroldAuthor: Michael Arold

Covestor model: Technical Swing

Disclosures: Long TNA

You might recall my post from June 7, where I discussed swing trading the Russell 2000 index (NYSE: IWM). I suggested to close shorts at the lower bound of the channel. So what should be the next move for a swing trader? Here’s the current chart:

iShares Russell 2000 from StockCharts.com, 6/29
iShares Russell 2000 from StockCharts.com, 6/29

Obviously, the Russell is about to touch the upper channel boundary. Therefore, it is really about time to close long index positions. Also note that uncle Russ is running into overhead resistance, which is coming from the declining trend line. At this point, however, I would not reverse the position and go short: relative strength vs. the S&P 500 has been positive and the intermediate trend, measured by the 20 day MA is about to turn up. So doing nothing and wait for a pullback is probably the best bet at the moment.

Note that I still own a portion of my small cap index long (Direxion Daily Small Cp Bull 3X (NYSE: TNA)) in the Covestor Model: Technical Swing. However, I’m on the way out and will determine when to sell it based on the 30 min intraday chart.


Chart from StockCharts.com, 6/29.