How are the markets looking for the week starting January 24, 2022? Robert Knight, Turbo Trading's Head Moderator, published his opinions on the major stock market indices 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 January 24th, 2022
SPX: The SPX has corrected about 8.8% from the year-end ATH. It formed and head and shoulders pattern and broke the neckline. It is a very sharp drop and markets are extremely oversold. It failed to hold 4500 support on Thursday and was down nearly 2% on massive volume on Friday. It has broken the long-term rising channel and the 20-day m.a. has crossed down through the 50. We should get a bounce in here but the overall trend is down. I would expect SPX to trade down to 4300 for starters. Below that with a continued market sell-off 3850 would be the target over the next 3 months.
NDX: The index traded below its 200-day m.a. on Friday trading down to support at 14400 area. It was down on big volume. It has traded out of the long-term rising channel. We may get a bounce in here 2.75%. It is down 14.6% from the ATH in November. Next support 14000 and 13500 (ultimate target). Chart is bearish.
DJIA: The Dow sold off with the markets dropping 2300 points in 6 days. It is down 7.4% from its ATH at the beginning of this month. The 20-day m.a. has crossed down through the 50. 33,270 next support area. Most likely the Dow sells off to 29500 before this downtrend is over. No stocks are immune to the selling pressure. Chart is bearish.
DJTA: The trannies failed to hold support at the 15470 level. Next key support 15000 then 14000. The 20-day m.a. has crossed down through the 50. Chart is bearish.
IWM: The small-cap ETF has broken down below a 1-year consolidation pattern. It failed at the $207 level and traded down to $196 on massive volume. If we get a real market rout, IWM could sell off to $170. But we are temporarily oversold and I would expect a bounce in here back to the $207 level before it continues lower.
FAS: After double topping 7 days ago, the ETF has dropped like a rock giving up ~25% in short order. Key support around $112 then $104. Chart remains neutral though as the financial sector likes higher rates. But that could change quickly if markets continue to sell-off. No sector will be immune, just some more than others.
LABU: The biotech ETF continues to accelerate to the downside. We have been bearish on this sector for some time and continue to avoid it. It has broken down below our 18.50 target support. Next level $12.75. The problem now, for the sector is that there will be so much overhead any bounce will only be a bid for the algos.
SMH: The sell-off in growth stocks continues to accelerate. The semiconductor ETF has failed key support at $276. It is right on support of the rising channel line, so the chart, technically, is neutral. But it is unlikely it holds. Next target $258 and $250 area.
GUSH: Even though oil remains very strong, the oil stocks are selling off with the markets. Support around $90 then $80. The ETF triple topped at $120 area. But it is still in a rising channel. Chart is neutral. Below $80 would be bearish.
NUGT: Gold remains strong but the ETF cannot withstand the market pressure and failed to hold the break out over $51. Support $47 and $44.
Technical Indicators: Markets are extremely oversold on the short term. The McClellan Oscillator closed at -213.22. 22.44% of stocks are above their 40 day moving average. The VIX also is bearish trading over 25 to $28.85. I would expect a bounce in markets in the next few days. But it will only be a temporary move as market participants will sell any bounce to liquidate positions.
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