Indices to Watch October 16, 2023
What can we expect on Monday, October 16 2023 at the New York Stock Exchange? Turbo Trading's predictions have been released by Head Trader Robert Knight, MBA. This report covers these 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 October 16, 2023
SPX: The index bounced off lateral support and the 200 dma around 4200. It surged 5% over 4 days. But in the last 2 days, it reversed, closing mid-channel of a down-trending channel. Resistance 4400 and 4450. On the short term, the index could go either way. We are at the start of earnings season offset by rising treasuries and political tension. The next 2 weeks should give us a good indication of the direction of the market for the rest of the year. I still think the bull market is intact and a year-end rally will ensue.
NDX: The megacap index double bottomed at 14600 area, trading to the declining top line and lateral resistance around 15300, where it was rejected. Support 14965, then 14590. It really needs to get through 15600 to show the next leg up in the bull market. Much below 14600 and it could trade down to 14200 and then the 200 dma around 13800. For now, it is mid-range in a consolidation pattern. But the bull market is still intact.
DJIA: The Dow has broken down, trading below its 200 dma. It is in a down-trending channel now and near the top of the channel. This move is a negative divergence from the broader market and NDX. If it makes a wave 5 leg down look for it to trade to 32600. Chart is bearish.
DJTA: The Transportation index was sharply rejected at 15200 area, trading back down under its 200 dma and to lateral support near 14600. A break below 14600 would confirm the bearish move on the Dow and would be negative for markets overall.
IWM: The broader market ETF remains in a 17-month consolidation pattern between $163 and $200. It is on support at $170. Below that and $167 and $163 are the next levels. Failure at $163 would be very negative for markets. For now, it remains neutral.
FAS: The financial sector ETF is mid-channel of a 7-month consolidation pattern. It is mid-range so it could go either way on the short term. It needs to trade through $75 to show a strong change in direction for the sector. Chart is neutral at best.
LABU: The chart is very bearish, breaking down out of a 16-month consolidation pattern. As suggested in previous posts, a break below $4 would be very negative for the sector and the move below that level would be strong (dropping 25%). I would expect this ETF to be rolled back maybe 1:8 or 1:10. Chart remains bearish.
SMH: After double topping at ATHs the ETF has made a 3-wave correction in a down-trending channel. It was rejected on Friday at the top of the channel and key lateral resistance around $153.65. Technically, this wave 4 of a 5 wave move to the downside. We'll see if it holds the rising channel line through the upcoming earnings season. Below $143 would take the ETF down to fill the gap around $134 (and 200 dma). Until it breaks $143, the chart remains bullish.
GUSH: The oil stock ETF had broken down through the neckline of a H&S pattern but the black swan event in the Middle East reversed the trend and saw the ETF trade back up through the neckline at $37. Key resistance at $41. It is mid-range and could go either way from this pop.
NUGT: Gold bullion popped $60+ on Friday giving the gold miner ETF a continuing surge off $24 support to the top of the down-trending channel at $32. Technically, the chart remains bearish, with the ETF in a strong down trending channel. A break over $32, though, may signal a change in direction for the ETF. Lateral resistance at $34.75 and the 200 dma at $35.85.
Technical Indicators: The McClellan Oscillator sits at -13.38 and 24.6% of stocks are above their 40 dma. VIX surged through 20 and sits just under that key level now. Markets are neither overbought nor over-sold. So there is energy for the market to go either way from this level.
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