Indices to Watch June 5, 2023
The Indices to Watch Report has been posted by Robert Knight MBA for June 4, 2023. This report discusses $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 5, 2023
SPX: With the debt ceiling past the market surged through key resistance at 4200 and now just short of next key resistance at 4300. The index remains in a strong rising channel but is coming up against key resistance. Megacaps are showing signs of being over-bought so expect a correction off the key level of 4300. But charts are very strong and as we have been saying since February the new bull market is underway.
NDX: The tech sector is so strong with megacaps leading the way. The index looks to be in wave 3 of a 5-wave move to the upside. Look for the gap fill at 14725 as the next resistance levels. Through that level and 15265 would be next. But markets are starting to get extended on the short term and we should expect a consolidation in wave 4 in here. Chart is very bullish.
DJIA: The index is in a trading range between 32650 and 34300 for the past 7 months. But last week it held the 200 dma and surged. It looks to be forming a reverse H&S pattern. A move through the neckline at 34300 would be very powerful for markets. I would expect it to break out before the end of this month.
DJTA: At the apex of a wedge pattern the Trannies popped up to key resistance at the 200 dma. The index needs to get through 14700 to confirm a break out on the DJIA. Chart is neutral and could go either way. A break below 13200 would be negative.
IWM: The broader ma0rkets are stuck in a trading range for the past year. Recently the range is between $170 and $180. On Friday, the ETF surged out of that range and traded up through its 200 dma. Next big resistance is around $190. A range break over that level would be very bullish for markets. There is lots of work for markets to do to get through all the overhead though. Chart remains neutral but expect it to catch up to the megacaps over the next few months. By September we should be testing the $200 level.
FAS: After the banking crisis sell off the financial sector ETF is consolidating in a trading range between $52 and $60 area. A range break out and next levels are $65 and $67. If the broader markets continue to trend higher, I would expect financials to get pulled along. There is a lot of overhead to work through. Below $50 would be very bearish.
LABU: The biotech double-bottomed at $4.25 and is now in a rising channel. It is approaching its 200 dma average around $7. Through that and $8.30 and $9.50 are targets. Over $9.50 would be a powerful range break (over 1 year of consolidation) for the ETF. Technically the chart is neutral and could go either way.
SMH: AI is driving the semis to a frenzied level. After making a reverse head and shoulders pattern the ETF broke out and remains in a strong rising channel. It looks to be in wave 3 of a major 5 wave move to the upside. But it is extended so look for it to consolidate at this level. Support in the $139/$142 range. It could even pull back to fill the gap at $134. But look for the ETF to test ATH at $160 area in the next 60 days.
GUSH: The oil stock ETF continues to hold support at $100. The Saudis are looking to cut production to move prices higher but Russia has boosted production to pay for its war and the US has once again become a net exporter of oil. If the economies of the world continue to expand the way they are then that should increase demand for oil and keep prices firming. Technically, the chart is bearish but a break over $124 should see a move to $138.50 and $150. It needs to hold $100 or it will make the next leg down to $85 for starters.
NUGT: Gold stocks double topped at $52 and failed to hold the neckline at $44. The ETF bounced off the 200 dma around $35. Chart is mid-range and could go either way.
Technical Indicators: On Friday, stocks trading above their 40 dma and the McClellan Oscillator spiked out of a consolidaiton pattern they had formed over the 3 months. VIX at 14.6 is approaching extremely overbought levels. Would expect megacaps to consolidate at these levels. But the broader markets have lots of energy to trade higher to test key levels. Markets are very bullish. The bull market is well underway.
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