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Indices to Watch Sampler May 31, 2022

The New York Stock Exchange re-opens after the Memorial Day holiday on Tuesday, May 31, and what does Robert Knight predict? This sample Indices to Watch Report has the details. 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 May 31, 2022

SPX: Dead cat bounce or change in direction? The index touched the bear market "line in the sand" with a 20% decline. On Friday it continued its 3 day surge up 2.5% on the day trading through key resistance levels at 4050 and 4150. It is approaching the top of the channel, the 50 day m.a. (4200) and some resistance at 4250. Technical indicators are extremely over bought. I think we get one more wave down (5th wave). It could test 3850 again. Failure there and 3700 area is the next stop.

NDX: 3 day surge for the index gaining 1,000 points. It is through resistance at 12600 approaching the next level at 13000. Most likely is this the 4th wave move up before we get one more wave (5th wave) down. With long term rates coming down, growth stocks may have bottomed before the rest of the market and a pull aback may not be severe. It needs to hold 11600 area otherwise markets will be go much lower.

DJIA: The Dow bounced off the bottom channel line and now is mid channel. With markets extremely overbought it could either way from this level. It is in an area of resistance now (32550) and up against the falling 50 day ema. We would want to see it hold 30550 area. Failure there takes it to 30000. Key resistance at 34000.

IWM: The Russell 2000 ETF bounced of a base around $169 and traded to resistance at $18, It is mid channel of a down trending channel so could go either way. Resistance levels $191.50 and $196. Chart, overall, remains bearish.

FAS: The financial sector ETF retraced 32% from its 52 week low. It is coming up against key resistance at $93. The ETF is mid channel of a down trending channel and could go either way from here. Maybe it gets to $100. But with markets extremely over bought expect a pull back to test the 52 week low.

LABU: The biotech ETF continues to lag and is forming a bear flag here. Resistance at $7 and $8. It remains in a strong down trending channel. Key support $4.35 area. If markets sell off from the extremely overbought level then unlikely LABU holds its ATL and they will roll it back 1:4. Chart remains extremely bearish.

SMH: The semis gapped up on Friday trading to lateral resistance at $248.75. It traded up through the 50 day ema but is mid channel. The chart has formed a reverse H&S pattern. Maybe SMH leads markets higher. Perhaps a test of $237.65 and hold to start a new uptrend as a leading indicator. But if markets sell off it may not be able to withstand the pressure.

GUSH: Oil remains very strong and as such, GUSH trades to new 52 week highs based on a strong commodity and strong market. It remains in a strong rising channel. Support $200 and $187. Top of the channel comes in around $250.

NUGT: The gold stocks ETF is under pressure with key resistance at $51. The chart is bearish with a 4th wave bounce here. Look for it to roll over to test $41 key support. Below that level would be a major break down for the ETF.

Technical Indicators: Markets are extremely overbought with the McClellan Oscillator at 209. 43% of stocks are above their 40 day moving average and the VIX at 25.72. With this momentum stocks could continue to trend up for a few more days but I would expect a pull back from these levels. But the pull back may not be severe or even just consolidate at these levels to indicate a change in direction for markets. The next week or 2 will give us a clear direction on where we are headed.

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