IWM - Russell 2000 ETF - Company Description

The IWM is the Russell 2000 iShares ETF. The ETF offeres exposure to 2,000 small cap U.S. companies. The investment seeks to track the investment results of the Russell 2000 Index, which measures the performance of the small-capitalization sector of the U.S. equity market. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. It may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the underlying index, but which the advisor believes will help the fund track the underlying index.

The Russell 2000 and the IWM have declined to the 200-day average, which has been strong support in prior market declines. There is no guarantee the index will rebound from this level because of the current fear of rising rates. Small cap stocks are especially sensitive to rate issues.

If the index is going to rebound into the Q3 earnings cycle this is where it should bottom. If we have a Q3 earnings rally, I would expect to see new highs by mid December.

Buy Jan $168 Call, currently $3.06, no initial stop loss.