Trade of the Day: iShares Russell 2000 Index ETF (NYSEARCA:IWM)

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Stocks sleep-walked through the Monday session, occasionally bumping into a wall…and turning around and heading another direction… then turning around and hitting another wall.

No catalysts were in focus yesterday, though there were a lot of moving pieces that apparently anesthetized each other. There was a lack of surprises from the G7 meeting of developed nations in Japan over the weekend, yet some disappointment was expressed over leaders’ inability to coordinate on stimulus.

On the “central bank talking heads” circuit, Eric Rosengren, president of the Federal Reserve Bank of Boston, told a Financial Times reporter that the most of the economic conditions needed to justify a rate hike are “on the verge of being broadly met.” Pushing a hawkish agenda, he argued the Fed has a “relatively low threshold” for assessing a rebound in growth, while hiring remains healthy and evidence points to the inflation target being met. He added that the voter over Great Britain’s exit from the European Community, known as “Brexit,” should not interfere with the FOMC’s decision.

Meanwhile, San Francisco Fed President John Williams told the press over the weekend that the U.S. election would not stop the bank from hiking rates. He believes that it is appropriate to hike rates two or three times this year, but has stressed that his estimate is data dependent. In the interview, he noted that the decision on whether to hike needed to strike a balance between responding to an improving U.S. economy while not hiking too much, too soon, given global uncertainties.

With the market getting a little spark from some merger news in the materials sector, as Bayer (BAYRY) has made another run at Monsanto (MON), we’re going to make an upside call in the iShares Russell 2000 Index ETF (NYSEARCA:IWM).

Buy the IWM June 17th $112 calls at market. 

The ticker symbol for the IWM call is IWM160617C00112000, and this is the monthly option that expires on Friday, June 17, 2016.

Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader’s Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments.


Article printed from InvestorPlace Media, https://investorplace.com/2016/05/ishares-russell-2000-index-etf-nysearca-iwm-2/.

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