Turbo Trading's Indices to Watch List for April 4, 2022, has been released. Head Moderator Robert Knight, MBA, offers his informed opinion based on 30+ years of trading. Note: Paying members get this report and much more. Get a free TurboTrading 1-Week Trial, or become a paid TurboTrading Member to receive the Stocks to Watch List. Here's the free sample:
Indices to Watch April 4, 2022
SPX: After an 11.4% surge over 11 days, the SPX has a "pause that refreshes". On Friday the index bounced off key support at 4500and closed at resistance at key 4545. The index moved too far too fast. It would be healthy if the index consolidated in here for another week or so before heading higher. I would look at this as a 2nd wave pull back in a 5 wave move to the upside. Expect SPX to trade to ATHs by this summer.
NDX: NDX has much the same look as SPX except it failed at 15200 and is back under the 200 day m.a. It did make a 5 wave move down and double bottomed at 13000 area. It failed at 15200 resistance. It is on 14750 support. It would be healthy for the index to consolidate in this level for a week or two as well before starting wave 3 of a 5 wave pattern to the upside.
DJIA: The Dow double-bottomed and broke out of the declining channel to trade up through the 200 day m.a. But it has backed off under that level. It did hold the 50 day. Key support 34000. I would look at this as a wave 2 pullback in a 5 wave move to the upside. Chart is neutral and could go either way right now.
DJTA: The stocks contained in the index are skewing the index and for now not showing any true picture. As such I am removing the index from my analysis until it returns to normal.
IWM: The Russell 2000 ETF double-bottomed (or perhaps reverse head and shoulders) around $188. It then traded up to key resistance at $208 and $211. It failed at those levels but is finding support at $204. If it can get up through $211 with enthusiasm I think a new bull market for small caps will get underway. Resistance at the 200 day m.a. at $218 level.
FAS: The financial sector ETF remains in a down-trending channel and failed at resistance at $130. It is under the 200 day m.a. For now it is trading in a range between $110 and $130. Bullish above, bearish below. The sector is reacting negatively to the 2/10 year treasuries rate inversion.
LABU: Overall the LABU chart remains bearish. But I think this is the bottom for the ETF. It appears to have made a V bottom right hand extension pattern. It needs to get through $17.50 and $21.50 area to confirm a new bullish direction. We put a swing trade on at this level as a move up could be explosive. Support $14.50 (stop loss).
SMH: Sharp 3 day sell-off right-hand for semis. The ETF is back under the 200 day m.a. Support $256 and $250. If it holds those levels and bounces it would form a reverse head and shoulders pattern (bullish). For now the chart is neutral and in a trading range between $256 and $288.
GUSH: Oil sold off to under $100 on Friday yet the ETF was very strong trading near the 52 week high. Oil at this price makes a lot of money for oil stocks and perhaps that is being reflected in the price surge coming into earnings season. But if peace breaks out in Ukraine look for oil to sell off to the $80 level and a corresponding move for the ETF. A lot of risk in this trade at this level.
NUGT: Like oil, gold is weaker yet the sector ETF is trading near recent highs. Over $75.25 look for moves to $81. Again, perhaps oil stocks are bidding up in anticipation of strong quarterly reporting versus a pullback in the commodity price.
Technical Indicators: After an overbought reading last week, markets pulled back. Now 58% of stocks are above their 40 day m.a. and the McClellan oscillator is 69.9. VIX is bullish at 19.63. The indicators have a bullish bias and there is internal energy for markets to resume the upward trend. Perhaps another week of consolidation would be healthier for markets. I would expect the technical indicators to remain bullish.
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