Indices to Watch Sampler July 6, 2021
The New York Stock Exchange was closed on Monday, July 5th 2021 in celebration of Independence Day. It opens for the week on Tuesday, July 6th. TurboTrading's Head Trader Robert Knight wrote his weekly "Indices Watchlist Sampler" (below). Note: Paying members get this report and much more. They get the Stocks to Watch List the night before trading days. Interested? 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 6, 2021
SPY: The SPY has broken out of a big consolidation pattern, up 8 of the last 10 days. It remains in a strong rising channel as mega-cap stocks continue to make new ATHs. It is mid channel though and after such a strong move it is vulnerable to a pull back. But near term targets are 4400 and 4500.
NDX: The index is very strong surging off a double bottom at 13000 and breaking out over the previous double top at 14100. It is mid channel of the larger rising channel and is also vulnerable to a pull back. But if this momentum continues look for target of 15400. Chart is very bullish.
DOW: The index was lagging but now at a triple top. The spike high is 35091. But the 34850 is the key break out level for it. It remains in a strong rising channel and looks to trade much higher. With the SPY and NDX making new highs every day, I think it is inevitable the DOW will follow suit. 36000 is the next target.
DJ Transportation: The Trannies are looking weaker. The 20 day m.a. has broken down through the 50. This move is a negative divergence from the rest of the indices. We'll see if it can break back above the 50 day m.a. Key resistance is 15350m area. Over that level and then, maybe, the trend will be intact. But a failure at this level and a roll over will be bearish for markets. It is at a critical juncture here.
IWM: The IWM is in a large consolidation pattern spanning the last 5 months. It has made multiple tops at $235. But with the strength of the other indices we should see this break out and start to run. $245 and $255 are the targets.
FAS: The financial sector ETF hade a sharp 24% sell off. It looks to have made a V bottom right hand extension patter. The 20 never did cross the 50. So the chart does remain bullish. $109 and $103 are support levels for it. Look for FAS to trade back to $127 area. Through that level and $140 is the next stop.
LABU: The biotech ETF has broken out of a down trending channel and is in a new rising channel. The 20 day m.a. average is crossing the 50. Key resistance around $86.25. Over that level and look for a move to $97 and $109. Under $71 would be bearish.
SMH: The semiconductor ETF broke out through a triple top after 5 months of consolidation. It pulled back and held support at $258.50 area. It looks like the SMH will lead markets higher as there is a lot of strength in this sector. $280 and $300 are targets.
GUSH: Oil remains in a strong bull market. But the GUSH has made a triple top around $103. It does remain in a strong rising channel. If oil continues to climb look for GUSH to trade to $115 and then $135. Key support around $90 and $85.
NUGT: The senior miners were hammered last month and the ETF is decidedly bearish now. For now I am avoiding gold stocks.
Technical Indicators: The technical indicators remain very neutral. Markets are neither overbought nor oversold. But as we have seen the IWM consolidate for the past 5 months, the indicators confirm that action. There is not much breadth to the market. All the action is lead by mega cap stocks. It is hard to say how much longer this condition will continue for. But if the large indices continue to make new ATHs eventually it will drag the small and mid cap stocks along. Small and midcap stocks are not the leading indicators. They are followers and until we see the large indices break down, we should see a catch up by the smaller cap stocks.
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