Indices to Watch Sampler March 21, 2022
What does Turbo Trading's Head Moderator Robert Knight predict for the markets for March 21, 2022? Will his recent market call play out? 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 March 21, 2022
SPX: The index has surged 7.3% in 4 days coming off a triple bottom at 4160 area. It has broken out of the declining channel it was in for the past 3 months. The index made a 5 wave move down (truncated 5th) and is now above the 200 day ema. The 50 never did cross the 200. It has key resistance at 4500 and 4550. I believe this is the start of the next leg up for the secular bull market and that the market lows for this cycle are behind us.
NDX: The index also made a 5 wave move down (truncated 5th) after a double top in Dec/Jan. The NDX has also broken out of the 3 month down trending channel and traded to lateral resistance at 14400. It is still below its 200 day m.a. around 14750. But the chart is a reversal pattern like the SPY and the NDX lows are behind us.
DJIA: The Dow also made a 5wave move down with a truncated 5th wave. It is back above the 200 day ema but remains in the confines of the declining tops line. Key resistance around 35630. Major support at 34000 and 33000. Look for upward continuation for the Dow.
DJTA: A positive divergence with the Trannies. The index made a reverse head and shoulders pattern and broke out through the neck line at the 15475 area. On Thursday it traded close to key resistance at 16620 area and backed off (inside day). After such a strong move it probably needs to consolidate some before continuation higher. A break over 16620 would be very bullish for markets as Trannies lead markets higher.
IWM: The Russell 2000 ETF made a double bottom last month after breaking down out of a year long consolidation pattern. On Friday it broke out of the down trending channel and traded up to key resistance at $208. It needs to get through that level and $211 to confirm a rising market. The 200 day ema also sits around that $211 level. It would be very bullish for markets for a break out through those levels. With such a broad sell off in small caps I wouldn't be surprised to see this ETF really accelerate to the upside.
FAS: The financial sector ETF made a major double bottom 2 weeks ago around $93. It has moved up through the 200 day ema and is coming up to resistance at $130. It is mid channel so could go either way right now. But the financial sector performs well with increasing interest rates so I would expect this ETF to continue higher from this level.
LABU: The biotech ETF made a new 52 week low on Monday last week and then rebounded with overall markets. The chart remains very bearish but most likely at the bottom. Perhaps it needs to pull back one more time $13 area to form a reverse head and shoulders pattern before it goes. Over $17.50 and it trades to $21.50 resistance. I will be watching closely for signs the bottom was put in and we can get aggressive with biotechs. With so many names so beaten down, a confirmation the sector has turned and there will be a lot of money made in the biotech names.
SMH: After a triple top at the end of last year, the semiconductor ETF made a 5 wave pattern to support at $240. The last 4 days the ETF reversed and broke out through the declining tops line. It also closed above the 200 day ema. Key resistance around $276.50, then $288. I would expect semis and financials to lead markets higher from here.
GUSH: The Ukraine conflict put tremendous upward pressure on commodities. Oil traded to $130+ and now hovering around $100. The ETF is in a strong rising channel but mid channel so vulnerable to a pull back. If peace breaks out then oil probably pulls back to $80 and GUSH will sell off. Avoiding oil stocks at the moment as there is too much downside risk.
NUGT: Gold surged to double top at ATH $2075. Subsequently it has pulled back to support around $1913. Bullion has performed well as both a hedge against inflation and uncertain times. Like oil, if peace breaks out in Ukraine gold could pull back to major support areas of $1850 and $1800. But inflation should temper any pull back.
Technical Indicators: The technical indicators have turned quite bullish with 56.7% stocks now above their 40 day m.a. The McClellan Oscillator, in fact is registering overbought at 155.5. Overbought doesn't necessarily mean it will pull back. But If it continues to surge and gets to 200+ then we would expect a pull back. VIX at 23.87 is neutral for markets. Under 20 would be very bullish. Expect markets to continue to trade higher.
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