Indices to Watch Sampler August 9, 2021
What does Robert Knight believe the Indices show about the markets on Monday, August 9? TurboTrading's Head Trader offers his insight in this sampler. Note: Paying 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 9, 2021
SPY: SPY trades to new ATH on Friday having a 50 point move or so above the break out level. It tested 4380 several times and held. The index does remain in a strong rising channel. It is mid channel so vulnerable to a pull back. But key support now at the 4350 with both lateral support and the 20 day m.a. Look for moves to 4400 and 4450.
NDX also made a new high on Thursday and pulled back on Friday. It remains in a strong rising channel. It has broken out of a wedge pattern. Look for 15400 (mid-channel) and 15700 (top of channel).
DOW made a nominal new high on Friday. It has broken out of a flag pattern bouncing off the 20 day m.a. It was consolidating for over 3 months so look for a strong move to continue. 36000 is the next target.
DJ-Transportation remains in a down trending channel. This trend is a negative divergence from the other main indices. For now, it is holding support at 14300. It is up against the 20 day m.a. and the declining tops line. Key resistance at 14700 and 15000. We need to see the transportation index reverse otherwise it could pull the other indices lower.
IWM remains in a large consolidation pattern. Resistance at $226, $230 and $234.50. Support $218, $211 and $208. It could go either way as the chart is neutral.
FAS: The financial sector ETF gapped up and broke out of a 2 month base pattern over resistance at $113. It traded to $119 and closed at $118.49. Chart is strong. Look for it to test the triple top at $126 area.
LABU: The biotech ETF remains in a down trending channel but seems to be finding support around $55. It is approaching the declining tops line and the 50 day m.a.. It needs to get through $66 to show any signs of recovery. Under $55 and it could test the double bottom at $50. Over $66 look for $85.
SMH: The semiconductor ETF is breaking out of a 6 month base trading to ATHs last week. It has made a strong move off $242 to trade to $272 for a 12.4% move. It is at the top of the channel so may continue to pull back. Key support at $263. Targets $275 and $280.
Technical Indicators: The McClellan Oscillator has come back from -50 to 43.27. It remains neutral though as it is showing we still do not have broad participation in the market. Only 42.86% of stocks are above their 40 day m.a. A big improvement from only 18% just a month ago but not convincing to move stocks higher. VIX is very bullish as the SPY trades to ATHs. So the market strength remains in the mega-cap stocks with little participation in the broader market.
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