Indices to Watch Sampler September 13, 2021
What does Robert Knight believe the Indices show about the markets on Tuesday, September 13, 2021? TurboTrading's Head Trader offers his insight in this sampler. 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 full Stocks to Watch List 5x a week. Here's the free sample:
SPY: The index sold off sharply, down 4 days in a row on strong volume. In the last 5 months, the index has sold off to the 50 day m.a. average right around the 21st of the month. It look like that pattern will continue. Watch to see if the 50 day m.a. holds this time. If it breaks down through it, then it would be very negative for markets and perhaps confirm what the DJ-Transpiration index has been foretelling. Overall, the index remains in a very strong rising channel. Next week should give us a good indication of direction.
NDX: The index made a large engulfing bearish bar on Friday trading down to support at 15440 (lateral support and the 20 day m.a.). If the selling continues look for it to trade down to 15185 area and then 15000 (50 day ma.a. average). Overall the chart is bullish and remains in a strong rising channel.
DOW: The Dow has traded down through the 50 day m.a. and at the long term rising channel line. The chart remains bullish, but just. Support around 34250 and 34000. If the Dow confirms the Transportation index that would be very negative for markets.
DJ-Transportation: The Trannies have turned decidedly bearish breaking down out of a bear flag. The 20 failed at the 50 day m.a. average and is rolling over. Trannies below 14275 area and I would look for a move down to $13900. This negative divergence between Trannies and SPY/Dow is disconcerting. If SPY fails to hold the 50 day m.a. and Trannies fail here, then I would look for markets to trade much lower and perhaps the end of the bull market is nigh.
IWM: The ETF for the Russell 2000 remains in a 7 month consolidation pattern and is mid channel. It failed at $230 resistance. Support $218, $211 and $208. A break below $208 would be very negative for markets.
FAS: The financial sector ETF made a triple top in the $130 area and now has traded down to the 50 day m.a. It has support at $113. But it is at the apex of a wedge pattern. A break to the down side and below $113 would be a negative sign for markets. Look for trades down to $100 and $95 if it fails to hold. Markets are at a critical juncture.
LABU: The biotech ETF broke out of a long declining channel. The 20 day m.a. has touched the 50. It held support at $63 area. This pull back could be wave 2. If the LABU reverses here and heads back up that would be the start of wave 3 to the upside. But failure at $62 and the ETF could trade back to $55 and $48. It may not be able to withstand the pressures of the overall markets if they sell off.
SMH: The semiconductor ETF made a nominal new high on Friday but closed lower form a spinning top candle (bearish). It is holding the 20 day m.a. and remains in a strong rising channel. The chart is neutral on the short term and could go either way.
GUSH: Oil remains strong at $70 per barrel. The E&P ETF has made a V bottom, right hand extension pattern (bullish). Support around $67.85. If it breaks out of the basing pattern then $80 and $90 are targets. But, again, it needs a strong market and a strong commodity to trade higher.
NUGT: Even though gold remains strong around $1800/oz, the gold producers remain in a bearish trend. Look for NUGT to trade down to $47.25Through that then $40 is the next level.
Technical Indicators: We were starting to get broad participation in the markets but Friday was a negative reversal. Only 39.3% stocks are above their 40 day m.a. The McLellan Oscillator also sold off sharply to -70.92. VIX also spiked up through $20 (bearish). Bias for the markets are now to the down side.
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