Want to find out what Robert Knight thinks the markets will do on Monday, December 6th? 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 6th, 2021
SPX: After making a double top around the 4720 level, the index has sold off about 4.8%. On Friday it opened strong but sold off to triple bottom around key support at 4500. It held the rising channel line. But now it has key resistance at the 50 day m.a. at 4570 and then 4600. Technical indicators are registering oversold. A break below 4500 would be bearish. Support at 4400 and 4300. Next week should give us an idea of direction. For now, it is only a healthy correction in the longer-term bull market. But Fed tapering may not let it last.
NDX: The index has formed a head and shoulders pattern and broke the neckline at 15,900. It closed below the 50 day m.a. and is on key support at 15,700. This move is a 7.5% pullback for the index. It does remain in a large rising bullish channel. It could pull back to 15,300 and the bull trend would still be in place. Friday was a bearish engulfing bar on huge volume (bearish). At this juncture, the index could go either way.
DJIA: The Dow also made a head and shoulders pattern and broke down through key support. It has traded down to the next key support at 34,000 (around 7%). The 20-day m.a. has crossed the 50 (bearish). Failure to hold 33,850 would be very bearish for markets and could pull the rest of the markets lower.
DJTA: The trannies were in a trading range between 16,600 and 17,000. But Last week they sold of sharply trading down near support at 15400. Thursday was a big bullish reversal day for the index and Friday it held support around 15,875 (50-day m.a.). For now, the chart is neutral and could go either way.
IWM: The small-cap ETF has sold off 13% in the last month. It has traded down to key support at $211 and $208. The small and mid-cap stocks have been beaten up and perhaps the sell-off now is exacerbated by year-end tax-loss selling. But if IWM trades below $208 it would be very negative for markets.
FAS: The financial ETF sold off 22% from it recent highs. The 20-day m.a. average is crossing the 50 (bearish). It has broken down out of the long-term rising channel line. Key support at $112 and $103. Chart is mid-range and could go either way.
LABU: The biotech ETF continues to get hammered down 413.2% on Friday. It is at support on the down-trending channel line and lateral support at $33. If it does bounce, resistance at $41 and $48. Chart remains very bearish and for now, we are avoiding the sector.
SMH: The semiconductor ETF remains quite strong and forming a bull wedge pattern. It is holding support on the 20-day m.a. A break below $298 would set it up for a move to $290. and $287.50. It has a gap fill at $283. It is probably another week before we see any meaningful direction in the ETF. As it sits now, it could go either way.
GUSH: GUSH double topped around $123 but pulled back 35%. It found support around $80. A soft market and soft commodity price is a double whammy for the sector. The 20-day m.a. average has crossed down through the 50. A break below $80 would be very bearish. Next, support $65. Resistance $90 and $100.
NUGT: The senior gold miners looked like it had changed direction and was in a strong rising channel. But the last weeks the ETF has sold off and now failed to hold the trend line. Next, support $40. For now, we are avoiding the sector.
Technical Indicators: The technical indicators are registering oversold. The McClellan Oscillator was extremely oversold last week registering -219. On the same day, only 18% of stocks were above their 40 day moving averages. They recovered a small amount on Friday but now registering oversold condition. The VIX spiked to 35.32 on Friday and closed in bearish territory over 30. This quick of a move for VIX is bearish and we could see an extension where VIX trades to 40 and 50. That would be very negative for markets. But I think markets bounce in here. The question is, "Is it a reversal or just a dead cat bounce?" The next 2 weeks should give us a good indication.
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