October 29, 2009 (FinancialWire) (By Frank Kollar) — Shares of iShares Russell 2000 Index Fund (NYSE: IWM) have broken below several support levels.

On Tuesday, October 27 iShares Russell 2000 broke below its 50-day moving average. This is the first time shares have closed below this average since early July. In July, the break below was followed by a rally to new highs.

On Wednesday, October 28, iShares Russell 2000 closed below its most recent correction lows closing at $56.81. Those prior lows were at $58.00 on October 2.

These breaks of short-term support levels point to a test of the 50% retracement support for the July to October advance. This support level is at $55.00 a share. A close below $55.00 would point to a test of the 61.8% support level at $53.16.

Should shares manage to close below $53.16, we will be looking for declines to reach all the way down to the July correction lows at $47.27 a share.

iShares Russell 2000 has had numerous bouts of selling in its March to October advance. All have been short-lived. If any of these support levels holds, there could be a rally and new test of the October highs. But until there is a bullish reversal in iShares Russell 2000, the likely path is to lower lows.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in iShares Russell 2000.

Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

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