Start the trading week of February 7, 2022 off right with the Indices Watchlist Sampler! Robert Knight, Turbo Trading's Head Moderator, has issued his report on the major stock market indices to watch below. 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 February 7, 2022
SPX: After topping at new ATHs at the end of the year the index plunged 600 points in a 3 wave down move. It found support around 4300 and bounced with about a 50% fib retracement. It got up to a declining tops line on the daily at the 50 day m.a. and failed. It should find support on the 200 day moving average at 4400. Failure then 4300. Below 4300 and we trade to bear market territory of 4150 and 4050. Chart is bearish.
NDX: Much the same chart as the SPX with a 12% pullback. It bounced to 15200 but gapped down on Thursday. It is now trading under the 200 day m.a. (bearish). It has some support at 14400then 14000. Failure there could take it into bear territory at 13300 and 13000.
DJIA: The index is neutral. It is mid-range from early Jan's highs and Jan 24 lows. Support around 34800. Resistance 36000. The value stocks (Dow) have held up far better than the growth stocks (NDX). The Dow is back over the 200 day m.a. and up against the 50 day. Chart could go either way. But if all markets sell off the Dow will not be able to withstand the pressure.
DJTA: The Trannies are now in a down-trending channel having traded down to 14600. It bounced but failed at lateral resistance. It held the 200 day m.a. on Friday. Support 15000 and 14600. Below those levels would be very bearish with a trade down to 14000 and 13700.
IWM: The small cap ETF broke down out of a 1 year consolidation pattern (very bearish). The 50 day m.a. has crossed the 200 day (death cross). It found some support at $191.50 level. On the hourly chart, the IWM is forming a reverse head and shoulders pattern now and maybe found the bottom. Over $204 would be a break of the neckline Key resistance at $207/208 level and $211. Failure at $191 and it trades to $180 and maybe $170.
FAS: The financial sector ETF is neutral in a range between $112 and $140. It is back above the 200-day m.a. and the 50 day. Over $140 would be bullish and perhaps a sign markets have seen their lows.
LABU: The biotech ETF remains very bearish. It bounced to $21 resistance and failed. Below $14.25 look for a move to $12.75. Under that level and the ETF will be rolled back again and recapitalized. For now, we are avoiding the sector except for special situations.
SMH: After consolidation for 2.5 months the ETF rolled over and broke down out of its rising channel. It is right on key support at the 200 day m.a. Key resistance $276 and $288. Below $250 and it trades to $242 and $235. Chart is bearish.
GUSH: With oil over $90/bbl the ETF is super strong trading to 52 week highs on Friday at $124.19. It closed at $114.40. It is vulnerable to a sell off if markets tank. But with oil looking like it wants to trade to $100+ oil stocks should remain in favor. Over $125 look for a trade to $135.
NUGT: Even though gold remains strong (over $1800) and inflation surging the senior miners continue to languish. It is in a consolidation pattern between $41 and $51. Bullish above, bearish below.
Technical Indicators: The McClellan Oscillator bounced off an extremely oversold reading at -274 and traded up to 50. It closed on Friday at -29. Only 25% of stocks are above their 40-day m.a. We thought it would bounce from such oversold readings but we may not get any follow-through and sell off again. The only positive indicator is the VIX (fear index) in a neutral level between 20 and 25 (closed 23.22). Not much direction from the indicators as markets could go either way. But if we are closed to key support yet only neutral with indicators a breakdown could be severe.
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