During this crucial time in the stock market, what does Robert Knight predict for the week starting July 11, 2022? This sample Indices to Watch Report covers the major stock indexes: $DJIA, $DJTA, $FAS, $GUSH, $IWM, $LABU, $NDX, $NUGT, $SMH, $SPX, and Technical Indicators. Note: Paying members receive this report and much more. Get a free TurboTrading 1-Week Trial, or become a paid TurboTrading Member to receive the Stocks to Watch List. Here's the free sample:
Indices to Watch July 11, 2022
SPX: The index has made a 5 wave move down trading into bear territory in a strong down-trending channel. It has bounced the last two weeks trading through key resistance at 3850. It is coming up against the 50 day ema, lateral resistance and a gap fill around 4000. There could be formidable resistance at that level. Perhaps a recession for Q3 and Q4 is priced into this market and it is looking ahead to Q1 2023. The chart continues to be bearish overall, but it is mid-channel so could go either way on the short term.
NDX: Perhaps the NDX has bottomed here. After a 5 wave move down declining 35% it may be in a 5th wave consolidation. The bottoming pattern looks like a reverse head and shoulders. But it needs to get through 12250 area to confirm. Formidable resistance at that level (gap fill, 50 day ema and lateral resistance). It has broken out of the declining channel though. So the next few weeks of earnings should show good direction for the markets.
DJIA: The Dow remains in a down-trending channel. Like the NDX, though, it may have formed a reverse head and shoulders. Key resistance at 32000 (whole number, 50 ema and lateral resistance). Stay tuned for direction over the next 2 weeks.
DJTA: Trannies are in a falling wedge pattern. It is coming up against key resistance at 13900 with lateral resistance and 50 day ema. It is coming into the apex of a bear wedge so a failure here would be a negative divergence and not good for markets.
IWM: The Russell 2000 ETF remains in a strong down-trending channel. It is coming up against resistance at $180 (lateral resistance and 50 day ema). It is mid-channel so could go either way. It is unlikely small caps will lead us out of a bear market. Generally, megacaps show the direction to the upside first.
FAS: The financial sector ETF remains in a strong down-trending channel and is forming a bear wedge. Key resistance at $69. Support $57.25. Chart remains bearish.
LABU: Biotechs look like they have put in a bottom. It is up through the 50 day ema and broken out of a declining channel. Overhead resistance at $10 and $11.50. The sector is extremely oversold so may reverse after 18 months of selling off (from $185 to $4 or an astonishing 98%).
SMH: Last week the Semis broke down to new 52-week lows. It then reversed sharply to make a V bottom right-hand extension type pattern. $210 is strong resistance. Earnings over the next two weeks showed show us direction for this sector. It does remain in a bearish down trending channel.
GUSH: Oil traded under $100 last week driving the E&P ETF to $100 support, down 61.5% from just 1 month ago. In times of recession expect a commodity "bust". I doubt the sell off for oil stocks is over. $100 and $80 next support levels. Chart is bearish.
NUGT: Another casualty of the commodity bust. It has made a 3-wave move down in a 5-wave pattern. It may trade back to $40 before rolling over to test the 2020 lows. Chart is bearish.
Technical Indicators: The McClellan Oscillator sits at 34.62 and 33% of stocks are above their 40-day moving average. VIX sits at 24.64. Markets are not over-bought or over-sold and have a bias to the upside. Fear is going out of the market and there is lots of energy available for markets to change direction as they approach key resistance levels. The next two weeks will be critical for bulls.
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