Indices to Watch Sampler August 30, 2021
What does TurboTrading's Head Trader Robert Knight think the Stock Market Indices show for Monday, August 30? Turbo Trading members get this report and much more. Get a free TurboTrading 1-Week Trial, or become a paid TurboTrading Member to get the full Stocks to Watch List 5x a week. Here's the free sample:
Indices to Watch August 30, 2021
SPY: The index remains in a strong rising channel trading to and closing at ATH. Fed Chairman Powell has said tapering will be begin but rates will remain near zero. The market already had factored that news in and as the economy strengthens, liquidity from the Feds will be replaced with liquidity from the growing economy. After a 4 day pull back the SPY bounced off the 50 day m.a. It has consolidated for 5 days and now looks ready to move higher. Top of the intermediate channel is around 4580. Look for SPY yo trade to 4600 before end of year.
NDX: The tech index also traded to new ATH nearly tagging our 15500 target. It is in a strong rising channel. It was in a consolidation pattern and bounced off the rising channel line and the 50 day m.a. The intermediate channel top and the long term channel top cross around 15850. Look for the NDX to trade to that level before year end.
DOW: The DOW remains in a strong rising channel and coming to the apex of a wedge pattern. With the strength of the economy growing and the Fed stance we should see the DOW stocks continue to trade higher. Look for 36000 before year end.
DJ-Transportation: The Trannies have broken out of a long term down trending channel and traded up against key resistance at 15000. The 20 day m.a. is trying to cross the the 50 (bullish). We need to see Trannies go to confirm the move of the SPY and DOW. Transportation is a key component of the economy and for now we have negative divergence. I would expect the Trannies to trade up through 15000 and back to ATH before year end.
IWM: The ETF for the Russell 2000 bounced off key support and was up 5 of the last 6 days. But on Friday it made a huge move up nearly 3% and breaking out over moving averages and lateral resistance. It does remain in a 7 month consolidation pattern. Watch for IWM to challenge resistance at $230 and the ATH at $234.50. A break out of this consolidation pattern would, most likely, mean a very strong small and mid cap market. Look for moves to $245 and $255.
Technical Indicators: Every time the SPY touches the 50 day m.a. we have seen the McClellan Oscillator become extremely over sold (-200). From there a rally has ensued. It has moved back up to a mildly overbought level at 75.69. Of late, that seems to be the point where the rally stalls. But with the current strength of the market it should maintain a level between 30 and 100 allowing for the markets to continue to trade higher. We are getting broader participation as now 52.5% of stocks are above their 40 day m.a. The VIX remains bullish at 16.39 and continuing to drift off. So, bias is to the upside for markets. But we are neither over bought nor over sold. Look for markets to continue to trade higher.
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