The Russell 2000 trade update

The Russell 2000 trade is now down approximately 7% since the trade began, and has behaved itself every step of the way.  Each price wave had plenty of power and therefore was predictable as you saw.

Now, I am seeing the bearish power begin to fail, and that loss of energy leads me to believe that the “easy money” is out of this index, and it is time to move on.  I would look for excuses to close out the position and plan to be done with it by the time I sit down to write next week’s column.

Now that the Russell trade is nearing it’s end, I am looking for new opportunities and have discovered a pullback trade in the making in the stock of Johnson & Johnson (NYSE:JNJ).

This stock has been booming higher after a tough sell-off, and has finally found resistance as it challenges the $100 per share level.

I think the bullish run has found it’s end, and now the stock will be pulling back into the zone of support drawn out in green on the chart above.  As I mentioned in the last column, when a market “jitters” there can be the opportunity to buy and sell the same shares over and over again, and I plan to do that here in JNJ.

As the green zone is tested, I will take in some shares, and flip them for a profit in the $96-97 area. Let’s see how many times this opportunity presents itself!

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