Indices to Watch Sampler December 13th, 2021
Want to find out what Robert Knight thinks the markets will do on Monday, December 13th? As TurboTrading's Head Trader, Mr. Knight is qualified to offer this public sample of his "Indices Watchlist." 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 Stocks to Watch List. Here's the free sample:
Indices to Watch December 13th, 2021
SPX: The SPX pulled back 6% after double topping at ATHs around 4718. On the pull back it held the long term rising channel line. In 3 days it made up the ground it lost . It made a V bottom pattern, now with a right hand extension just under ATHs. Chart is bullish. I would look for the Santa Claus rally to continue to take the SPX to new ATHs. 4750 and 4800 targets.
NDX: The NDX is at a critical juncture here being hemmed in by a declining tops line and lateral resistance at 16,455. If it fails at this level it could set up for a head and shoulders pattern (bearish). Support 15,893 and 15,710. It does remain in a strong rising channel. The next few weeks should determine the direction.
DJIA: After trading to ATHs in early November the Dow made a 5 wave move down to support around 34000. It then made a V bottom pattern (bullish) and traded back up through resistance at 35880. The 20 day m.a. has crossed back up through the 50 (bullish). Resistance now 36326 and 36566. If it can trade through those levels look for 37000 and 37500 as targets as the bull market continues.
DJTA: The Trannies also made a V bottom, right hand extension pattern (bullish). It held support at 15400 area. It is up against resistance at 16600. It needs to get up through 17050 for continuation. If it fails at 16700 it may change the story. But for now, the chart remains bullish.
IWM: After a break out of a 9 month consolidation pattern, it looked like the mid and small caps were finally coming into their own. But it wasn't to be. After trading to ATHs the ETF pulled back 13%. It held support at a key level of $211 area. There remains a lot of overhead resistance for stocks as many have sold off severely (read biotechs). IWM below $207 and the overall market story changes. For now the ETF chart is neutral and it could go either way. Strong mega-caps don't seem to matter.
FAS: The financial sector ETF double topped at $151. Over the next month it pulled back 22%. It did hold the long term rising channel line. But the 20 day ma.a has crossed down through the 50 (bearish). The long term chart is still bullish but it is coming into the apex of a wedging pattern. Support $123. Resistance $140. Chart is neutral on the short term.
LABU: There was capitulation in the Chart last week as the ETF spike down to support at $33 but closed at the top of the range. The next day day it gapped up and had follow through above key resistance at $41. I put a speculative swing on the ETF thinking that we would get continuation at least to $48 and $50. It wasn't to be so. It pulled back sharply for 2 days. It needs to hold the $33 level other wise there is big trouble for the sector. If it fails, $27 and $22 are next support levels. Chart remains very bearish.
SMH: The semiconductor ETF is in a bull flag pattern right near ATHs. It is holding the 20 day m.a. but hemmed in by a declining tops line. Over $316 and I think the next leg up for the sector will start. If so, look for this sector to lead markets higher. Under $300 and that probably changes the story.
GUSH: The E&P ETF double topped at $122. It then pulled back 30% but held support at $80. It is now mid range. Chart is neutral and could go either way.. The commodity is strong but the market is weak.
NUGT: Even the gold market remains strong, the senior miner ETF has broken down out of its recent bullish trend. Again, the commodity is strong but the market is weak. Avoiding the sector for now.
Technical Indicators: The markets have bounced from an extremely oversold reading but still remain under pressure. The McClellan Oscillator is at -21.46. Only 32.58% stocks are above their 40 day moving average. So the broader market remains weak. Yet VIX is back under 20 at 18.69 (bullish). All of the strength in markets remains in mega cap stocks as the broader market languishes.
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