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Indices to Watch Sampler January 18th, 2022

What is happening with the stock markets on January 18, 2022? Turbo Trading's Head Moderator, Robert Knight, discusses the major stock market indices in this weekly report. 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 January 18th, 2022

SPX: Overall, the SPX remains in a strong rising channel. But it doesn't really tell the whole story as high growth stocks are off sharply from their highs. There is a lot of volatility in the last two months with the SPX having five ~4-6% swings. But the 20-day m.a. remains well above the 50. Key support levels at 4582, 4545, and 4500. Even so, a pullback to 4500 is still only a 6.6% pullback from the ATH. We are coming into key company earnings over the next two weeks and we will see how the SPX reacts to new P/E. For now, the bull market remains intact.

NDX: The index double topped in Nov/Dec and is in a big consolidation pattern with a range between 15400 and 16600. This chart is a negative divergence from the SPX as many of the high-tech stocks got pummelled and the index is much weaker. It did bounce off support on Friday but the 20-day m.a. is crossing the 50 day (bearish). Support 15200 and 15000 (200-day m.a.).

DJIA: Just at the start of the new year, the Dow made new ATH. But it couldn't withstand the pressure of the general sell-off in markets. It held support on Friday at key support at 35631. It continues to make higher lows. A break below 35631 and it probably trades to 35000. Earning season should give the Dow a clearer direction.

DJTA: After topping at 17000 the trannies pulled back with markets and double-bottomed at 15500. It is now wedging with support/resistance at 16000. Chart is neutral and could go either way.

IWM: The small-cap ETF has been in a consolidation pattern for 10 months. This is a clear sign of sector rotation. For now, financials and oil are keeping it up and biotechs are trying to draw it lower. This is key support for it in the $208/$211 range. A break below $207 would be a change in direction for markets.

FAS: Last week the financial sector ETF traded to new ATH but sold off sharply with the markets. The sector generally likes higher rates but if markets go down, everything sells off and values are re-evaluated. The ETF did bounce off $140 support and the 20-day m.a. Support levels $135 and $130. Over $150 and the ETF most likely continues to move higher. $160 and $170 targets.

LABU: Biotechs continue to get hammered. The chart is very bearish. On Friday it sold off to lateral support at $122 and reversed. Resistance now at $29 and $33. Support $18.50 and $13. We continue to avoid the sector.

SMH: The semiconductor ETF remains in a channel between $288 and $320. It is mid-range at $307 so could go either way. A break over $320 would be very bullish for markets especially if FAS breaks out at the same time. Earnings the next few weeks so we should know soon.

GUSH: Oil remains very strong at $84/bbl. The oil sector ETF remains in a strong rising trend after a pull back to $79 support. Key resistance at the $123 area. With the strength of oil, I would expect GUSH to trade to $135 and $160 as oil trades to $100.

NUGT: Gold remains strong and has support from strong inflation numbers. The senior miners, though, remain in a trading range between $44 and $52. Bullish above, bearish below.

Technical Indicators: The McClellan Oscillator is neutral closing at -.25 on Friday. 43.83% of stocks are above their 40 day moving average. So no clear indication one way or the other for the direction of the market. VIX is back under 20 (bullish). So sector rotation is the name of the game, not bringing any fear into the market..

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