The Russell 2000 ETF managed a double-digit gain in 2024, but did it the hard way with several deep pullbacks. Pullbacks within uptrends are opportunities and we can find such opportunities using %B.
The chart below shows the Russell 2000 ETF (IWM) with the Zigzag(8) indicator. This indicator changes direction when there is a move greater than 8%, which means it ignores price moves that are less than 8%. I am showing this indicator to highlight five pullbacks of 8% or more in 2024. That’s a lot. In contrast, the S&P 500 SPDR (SPY) only experienced one 8+ percent pullback in early August.
Overall, IWM advanced 10% in 2024. That seems like a good year, but it was a “hard” 10% when we include the five 8+ percent pullbacks. This is simply the nature of small-cap stocks. They are less “trendy” than large-caps and have higher betas, making them more susceptible to wider fluctuations. Traders need to consider this when trading small-caps. As noted in Chart Trader this week, we see similar price action in the S&P 500 EW ETF (RSP) and S&P MidCap 400 SPDR (MDY).
Buying upside breakouts is probably not the best strategy for trading IWM. Instead, traders should consider pullbacks and mean-reversion opportunities. We can identify such opportunities using Bollinger Bands (20,2) and %B (20,2). The middle line on the Bollinger Bands is the 20-day SMA and the bands are two standard deviations above and below. A close below the lower band means price fell two standard deviations and this creates an oversold condition.
Chartists can quantify oversold conditions using %B, which falls below 0 when the close is below the lower Bollinger Band. The blue lines on the chart above show %B dipping below 0 four times in 2024. Note that I would also only look for oversold conditions when price is above the 200-day SMA (long-term uptrend). When the bigger trend is up, a close below the lower Bollinger Band signals an oversold condition that can lead to a bounce.
December was a rough month for many stocks and ETFs. Even so, the weight of the evidence remains bullish for stocks and these pullbacks look like corrections within bigger uptrends. This week’s reports and videos focused on long-term breadth indicators, short-term oversold breadth, leading ETFs and a dozen ETFs with tradable pullbacks.
Multiple Israeli settler attacks against Palestinians have been reported in parts of the occupied West Bank after gunmen killed three settlers and injured eight others earlier on Monday in the latest explosion of violence there.
While tensions have been rising in the West Bank for years, the October 7 attacks by Hamas and the subsequent Israeli assault on Gaza has ushered in a volatile new chapter in the occupied territory.
Attacks on Palestinian communities by Israeli settlers, emboldened by their country’s offensive in Gaza and support from Israel’s right-wing government, have increased – while there have also been attacks against the settlers.
Earlier on Monday, Israeli vehicles were targeted on Route 55 in Al-Funduq, a Palestinian village in the West Bank, according to Israeli authorities. The road, which snakes through the northern West Bank, passes through the Jewish settlement of Kedumim.
Two women in one car were shot dead and a man in a second car 160 yards away died of gunshot wounds, Israel’s Magen David Adom (MDA) emergency service said.
A further eight people were injured in the attack, including the bus driver, who was shot in his limbs and abdomen, according to the MDA.
The deadly shooting sent tensions soaring and within hours the official Palestinian news agency WAFA reported multiple attacks on Palestinians.
On the incident in Hajja, the Israeli military said they received several reports on Monday evening of “Israeli civilians who entered the village” and had “caused damage to property” and Israeli came to the scene.
Two more incidents were reported southeast of Ramallah where Israeli settlers set fire to an agricultural room in the town of Turmus Ayya on Monday evening, according to security sources who told WAFA. Meanwhile Israeli settlers attacked Palestinian vehicles with stones near Bethlehem, according to WAFA.
‘Settle accounts’
Israeli Prime Minister Benjamin Netanyahu vowed retaliation following the attack by gunmen earlier in the day. In a statement on X, he pledged to “find the abhorrent murderers and settle accounts with them and with all those who aided them. No one will get away.”
Netanyahu is expected to hold a cabinet meeting on Tuesday and discuss the West Bank.
While there has been no claim of responsibility yet for the shooting, it has been praised by the Palestinian militant group Hamas and been labelled a “terrorist attack” by Israel.
Speaking at the scene, Israel Defense Forces (IDF) chief Herzi Halevi said the “clock is ticking” for the attackers, and vowed to track down those responsible, make the route safer, and intensify Israel’s “intense and wide-ranging” operations “against terrorism” in the occupied West Bank.
Israeli authorities later identified the two women as Aliza Reiss and Rachel Cohen – two civilian residents of Kedumim, both in their 70s – and the man as Yaakov Winkelstein, a police investigator from Ariel, a settlement south of the site of the attack.
Rephaela Segal, assistant mayor of Kedumim, described the women as “young in nature” and said Cohen had been volunteering as a special education teacher in her retirement. Reiss was a counselor at a high school in a nearby settlement, Karnei Shomron, and both were traveling to Karnei Shomron at the time of the attack, Segal said.
This isn’t the first time in recent months that violence has broken out in this part of the West Bank. In August 2024, a group of 30 armed Israeli settlers attacked Jit, a Palestinian town just 10 minutes from Kedumim. They fired bullets, tear gas and set homes and cars on fire, according to residents who witnessed the attack.
Volatile new chapter
Recent international focus on the region has been largely on Israel’s military operations in Gaza. But another major escalation of violence has been playing out around 60 miles away in the Israeli-occupied West Bank where 3.3 million Palestinians are living under Israeli military occupation surrounded by hundreds of thousands of Israeli settlers. Such Israeli settlements are considered illegal under international law and by much of the international community.
According to the UN, more than 500 Palestinian civilians were killed in the West Bank during 2024, with children bearing much of the violence. The UN said in December that 2024 had been a deadlier year for Palestinian children in the West Bank than the prior seven years combined. Since the October 7 attacks in 2023, at least 169 children have been killed by Israeli forces and Jewish settlers in the West Bank and East Jerusalem, according to the UN.
Meanwhile, 2024 was the third-deadliest year for Israelis in the West Bank since data collection began in 2008, according to the UN, which recorded the deaths of 34 Israelis – 15 soldiers and 19 civilians. Of those civilians, seven were settlers.
In August, the US announced sanctions against an Israeli organization, Hashomer Yosh, allegedly responsible for supporting settler violence in the West Bank against Palestinians, according to a State Department spokesperson.
Attacks have also come as the Israeli government ramped up approvals of Israeli settler housing. In July, Israel’s government approved a large land seizure in the occupied West Bank – the biggest since the 1993 Oslo Accords set out a path for peace between Israel and the Palestinians, according to the Israeli rights group Peace Now. The area was converted to state land, according to a document from the body, but the official notice wasn’t posted until days after, Peace Now said.
On Wednesday, the Israeli government is due to hold a construction planning meeting to discuss Israeli settlements housing approvals, the sixth consecutive week of Settlement Contruction Planning Meetings, according to Peace Now.
“The shift to weekly planning meetings represents both a normalization and intensification of settlement construction,” Peace Now said, adding that if the coming plans are approved, “the six-week total will reach 2,377 housing units. At this rate, 2025 could set new records, with projections exceeding 1,500 units per month,” Peace Now said, adding that it’s as a result of “policy changes” that have been introduced by Netanyahu and the current government.
Many small businesses are breathing a bit easier as inflation has cooled and the race for workers slows. But consumers’ steady embrace of credit cards is taking a growing bite out of their margins.
Gene-Christian Baca, the owner of Walter’s Hot Dogs in Mamaroneck and White Plains, New York, estimated that he now pays $50,000 a year in costs associated with processing credit card transactions, a sum he says has ballooned with rising card processing rates and more customers paying with cards over cash.
“Every year, 3% of all of our sales is washed away just to credit card processing,” he said.
A Visa credit card inserted into a card reader in Tiskilwa, Ill., on Sept. 18, 2018.Daniel Acker / Bloomberg via Getty Images file
Merchants have long shouldered these “swipe fees,” the catchall term for businesses’ payments to banks and card companies each time customers swipe. While a federal rule caps debit card swipe fees at 21 cents per transaction, those for credit cards can be much higher.
And as many shoppers ditched cash for plastic cards or mobile payment apps, businesses have seen credit card transactions swell. They made up 32% of all U.S. consumer payments in 2023, up from 24% in 2019, according to a Federal Reserve study. Cash shrunk its share to 16% over the same period, down from 26%.
Spending on American Express, Discover, Mastercard and Visa cards in the U.S. soared to $5.25 trillion in the first half of 2024, up from around $4.98 trillion during the same period in 2023, according to data provided to NBC News by the Nilson Report, which covers the payments industry.
These shifts in customer habits have added to many businesses’ costs. Merchants paid an average of 2.26% in swipe fees for transactions using the Visa and Mastercard credit card networks in 2023, the latest year with available data, according to Nilson. The two companies accounted for more than $100 billion of the $172 billion in total U.S. swipe fees in 2023, Nilson said, and Visa accounted for 52% of credit card spending on the four major card networks.
Some of Visa’s fees are now going up. The card network raised two of the credit card swipe fees it charges banks and processing companies on Jan. 1. The move comes amid growing pushback from critics, including some lawmakers, who say swipe fees are excessive and frequently get passed on to shoppers.
“Most likely, higher swipe fees from Visa would mean higher prices for people at the store eventually,” said Matt Schulz, chief credit analyst at LendingTree. “It’s unclear as to how quickly that would happen, but generally speaking, when these fees tend to go up, merchants would tend to pass those extra costs along to consumers.”
The Merchants Payments Coalition, an advocacy organization backed by leading restaurant, retail and other trade groups, estimates Visa’s additional fees will total $100 million per year.
“That seems like not a lot, but it increases the amount of every single transaction, and that really adds up over time,” said Doug Kantor, a member of the Merchants Payments Coalition’s executive committee and general counsel at the National Association of Convenience Stores.
The Merchants Payments Coalition says the $172 billion in swipe fees in 2023 set a record and estimates they cost the average family more than $1,100. The group is pushing for more transparency with credit card fees, more competition among networks and lower fees.
Visa says its changes are meant to make the network better. When confronted by policymakers about some of its swipe fees, the company has said that it “has no incentive to set [them] at levels that are too high or too low.”
A Visa spokesperson told NBC News in a statement: “We are constantly enhancing our network to better serve the businesses and consumers that increasingly choose to transact with us. Everything we do is designed to make paying and being paid with Visa more convenient, secure and reliable.”
The Electronic Payments Coalition, an advocacy group supporting card networks including Visa, says average swipe fees haven’t changed much over the last decade even as sales have increased. The organization has also noted that businesses incur distinct costs by handling cash. Those can range from operating cash registers to paying bank account fees.
Businesses handle swipe fees differently. Some, like Walter’s Hot Dogs, bake the costs into their prices. Others are trying to entice customers to use cash. Patz Deli in Manchester, New Hampshire, charges customers a 4% convenience fee for credit card transactions to cover the costs of processing fees and credit card equipment.
“It’s a cost that we don’t necessarily have to take on ourselves because it’s not our credit card,” said owner Pat Burns. “It’s your choice to use it, not ours, but we’re the ones who get charged for it.”
He said the deli introduced the convenience fee within the last couple of years as it faced mounting pressure from taxes, wages and other expenses.
“At the end of the month, by the time you bring home any type of money, 10 other people have already had their hands in it,” Burns said. “Even just a little bit like on the credit cards, 3, 4% goes a long way helping small businesses stay afloat.”
Consumer experts recommend using cash for small transactions, using rewards cards to make the most of each purchase and paying in person rather than over the phone when possible. Phone transactions often result in a higher fee for businesses due to security risks.
The fight over swipe fees has reached Congress. The Credit Card Competition Act, a bipartisan bill spearheaded by Sens. Dick Durbin, D-Ill., and Roger Marshall, R-Kan., aims to boost competition among credit card processing companies — something the Merchants Payments Coalition says is essential.
But the bill has stalled. Several groups supporting banks, credit card networks and credit unions are opposing the measure, saying it would harm small businesses and consumers, in part by limiting rewards.
“Swipe fees are definitely a really contentious thing and have been a battlefield between credit card issuers and networks and merchants for a long time,” said LendingTree’s Schulz. “It feels like that battle is really only going to keep going on for the next little while.”
