Indices to Watch June 26, 2023
What might happen after the opening bell rings at the New York Stock Exchange on June 26, 2023? Robert Knight, the head trader at Turbo Trading, wrote this Indices to Watch report. He covers stock indices: $DJIA, $DJTA, $FAS, $GUSH, $IWM, $LABU, $NDX, $NUGT, $SMH, $SPX, and Technical Indicators. Note: Paying members receive 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 June 26, 2023
SPX: The index flagged in early June just under 4300 resistance. It then broke out and traded near key resistance at 4500. It got to lateral resistance and the top of the channel. As expected, it pulled back as profit-taking set in. 4300 is key support for it now. In 2 weeks 2nd quarter earnings will start to come out giving further direction for the markets. But, it remains in a strong rising channel and a pullback here could be wave 4 of a 5-wave move to the upside. Chart remains bullish. 4500 and $4650 by the end of the summer are targets.
NDX: The index made a monster move in wave 3 of a 5-wave pattern in a strong rising channel. It backed off at key resistance at 15250 (lateral resistance and rising top line). Support 14500 and 14250 areas (lateral support and rising bottom channel line). Look for it to consolidate before heading to all-time highs by end of year. Chart remains very bullish.
DJIA: The Dow is poised to make a major break out through the neckline of an 8-month reverse H&S pattern at 34300 area. Continued momentum through that level would be a very strong buy signal for markets (and the economy). Support 33250 and the 200 dma around 32850. Chart is very bullish.
DJTA: Trannies moved to the upside at the apex of a wedge pattern. It is up through key resistance around 14625. 15200 is the next level of resistance. Over that level with the Dow over 34300 would be a strong Dow Theory buy signal.
IWM: The broader market ETF tested key resistance at $190 but was rejected. It sold off sharply back to key support at $180 area (lateral support and 200 dma). The 50 ema has crossed up through the 200 dma (golden cross) giving a bullish signal. The ETF has been in a range between $170 and $190 for over 1 year. A break over $190 should signal a new direction for the broader markets to catch up with the megcap market leaders.
FAS: Financials continue to lag the growth stocks. After the banking crisis, the sector has been flagging for the past 4 months. It did make a double bottom at $50. So, eventually, the sector should catch up but it needs to get through $70 (lateral resistance and 200 dma ) before giving a buy signal. Chart is neutral at best.
LABU: The biotech ETF was in a rising channel after making a double bottom at $4. It briefly traded up through its 200 dma but was not confirmed with the 20 or 50 ema crossing through it. It was rejected at $7.70 and now has broken down below the rising channel line. We'll see if it holds $6 to re-enter our recent swing trade. For now it remains in a 13-month consolidation pattern between $5 and $9.50.
SMH: The semis ETF traded just short of all-time highs before profit-taking set in (as would be expected). It remains in a strong rising channel but mid-channel so could go either way on the short term. Support $142.85 and then the gap fills at $134. Look for SMH to be trading at new ATHs before the end of the year.
GUSH: I thought GUSH could go and put on a swing around $110 average but it was rejected at $124 resistance and failed to hold $112. Look for it to test $100 again as oil prices are under pressure from a lot of fronts (Russia selling as much as it can, US a net exporter, sales from US strategic reserves continue). It remains a trading range for now between $100 and $124. Bullish above, bearish below.
NUGT: The gold miner ETF double topped at $52 area and sold off with the falling commodity price. It has failed to hold key support levels and now back under its 200-day moving average. Support $32 and $29.
Technical Indicators: The McClellan Oscillator sits at -92.25 and 49.47% of stocks are above their 40 dma. VIX sits at a very bullish 13.44. Megacaps are overbought and need to consolidate in here further. The broader markets are mildly oversold in here. It is counterintuitive, but as we approach key support and if markets are oversold we won't have the energy available to take markets lower. Thereby making the downside move a dip by rather than a change in market direction. Overall, I would expect the broader markets to break out through key resistance as SPX trades back to ATH by end of the year.
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