What's happening on the New York Stock Exchange on Monday, July 12th? TurboTrading's Head Trader Robert Knight writes his weekly "Indices Watchlist Sampler" to fill you in. 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 July 12, 2021
SPY: SPY trades to new ATH on Friday but with weak technical. Generally, that is not a good sign. But Thursday down day looks like an island reversal pattern making Friday's move very bullish. The SPY remains very strong but there is little breadth to this market and a negative divergence with the Trannies. We are coming into earnings season as well. I would look for SPY to trade to 4400 and 4500 (top of the channel) if this rally continues. Support around 4270.
NDX: The NDX is in a strong intermediate rising channel in the confines of a massive long term channel. It broke through a double top mid June and continues to march strongly ahead. Near term targets 15000 and 15500. Support 14500.
DOW: DOW made a nominal new closing high breaking through a triple top. It is in a 3 month consolidation pattern. So, a break out from this level could be quite strong as the chart did bounce off the rising intermediate channel line to break out. Next targets 35500 and 36000.
DJ Transportation: The Trannies had an inside day on Friday after a sharp sell off on Thursday. It is in a down trending channel and the 20 day m.a. average has crossed down through the 50. This direction for Trannies is a negative divergence in the market. It needs to get back through 15000 and 15300 to show a change in direction and to start to confirm the new high moves with the other indices. Failure to do so could drag the other markets lower.
IWM: The IWM remains in a 6 month consolidation pattern with a triple top at $235 and multiple bottoms at $208. It is mid range right now. If the larger markets continue to surge, I would expect IWM to follow. A break out over $235 could be explosive. Targets $245 and $255 for starters. Intermediate support at $218 area.
FAS: The financials sector ETF has turned bearish. It double topped at $130 and now is hemmed in by a declining tops line. Key support at $95.40 area. Below that and we could see a move to 485. A break out over $113.35 would be bullish and perhaps it would take a run at the ATH.
LABU: After breaking out of the declining channel the biotech ETF looked to have changed directions. But it then sold off hard from $83 to $62. It rebounded on Friday. It is now mid channel of a consolidation pattern and could go either way.
SMH: The semiconductor ETF break out over the triple top but failed to continue. It pulled back to support around $245. Friday it reversed and traded up to the triple top high. With the strength of the large indices, I would look for this to break out again and continue higher. Targets $270 and $280.
GUSH: Oil is in a strong bull market. Yet the oil stocks sold off sharply from the double top high around $103.50. They held support at $80. If small and mid caps break out then we should see continuation for GUSH back to $103 for starters. Through that look for $115 and $135. I would expect to see oil trading at $100 over the next year.
NUGT: Even though gold remains strong, the senior miner's ETF is decidedly bearish. We will see which one leads the way.
Technical Indicators: The McClellan Oscillator traded to to -150 on Thursday, giving an oversold reading. At the same time, only 28% of stocks were above their 40 day m.a. That combination gave an oversold reading and so not surprising we had a rally on Friday. Now, the Oscillator is at -27.4 and 44% of stocks are above their 40 day moving average. Bias remains to the downside, but the markets are neither overbought nor oversold. The divergence is VIX which remains bullish. Not surprising, though as FAANG stocks continue to trade to new ATHs.
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