Indices to Watch Sampler September 7, 2021
What does Robert Knight believe the Indices show about the markets on Tuesday, September 7, 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 remains in a strong rising channel and after breaking out to new highs is flagging. The chart is very bullish and looks to trade higher. Look for 4580 and 4600 as next targets by the end of September.
NDX: Much the same pattern as SPY, trading to new ATH on Wednesday and flagging. Look for 16000 and 16125 in short order.
DOW: The Dow is coming into the apex of a wedge pattern, being hemmed in my a declining tops line. It is holding support on the 20 day m.a. It is in a strong rising channel. So I would look for continuation to 35670 and then 36000 by end of year.
DJ-Transportation: The Trannies still lag the other major indices. But it has broken out of a declining channel and coming into the apex of an ascending triangle. It needs to get through 15000. If it does we should see a strong short squeeze taking the Trannies to 15450 and then back to ATH around the 16000 level. Failure to break out from this level could be a strong negative divergence for markets.
IWM: The ETF for the Russell 2000 has been in a consolidation pattern for 7 months trading in a range between $208 and $234.50. It recently traded up through resistance at $226 but failed at $230 Resistance. If the ETF should trade above $234.50 we could see a strong market for stocks we trade. On a break out, look for $256 and $265 by year end.
FAS: The financial sector ETF remains in a strong rising channel. It is up against resistance at $130 forming a mini-wedge here. If it can break out over $130 look for FAS to trade to $149 and $165 by year end.
LABU: The biotech ETF has bounced back and broken out of a declining channel. The BIIB is even stronger trading back near ATHs. If BIIB should get through $114 area we could see a very strong squeeze in the biotechs. Such a surge would be good for the overall market as well as strong biotechs tend to spill over to other sectors.
SMH: Chip shortages (so premium pricing) has propelled the SMH to new ATHs. The ETF is in a strong rising channel and has flagged the last 4 days. Look for SMH to trade to $285 and $290 over the short term.
GUSH: Even though oil remains very strong, Gush had a 50% haircut. I now looks like a V bottom right hand extension pattern. Support around $67.65. If oil stays strong and markets continue to move up then look for $80 and $90 GUSH.
NUGT: Gold remains strong yet the senior miners remain in a bearish trend. The gold ETF is up against the declining tops line and the 50 day m.a. It is too early to try to anticipate a change in trend. I am avoiding gold stocks for now.
Technical Indicators: McClellan Oscillator did reach a point of mildly over bought. But has retraced to 56.82. 55% of stocks are above their 40 day m.a. So we are starting to get much broader participation in the markets and not just mega cap stocks. We are neither overbought nor oversold. But we do have a strong bias to the upside. VIX has a reading of 16.41 showing no fear in the market at this level. Under 20 is bullish. Extreme readings at 10 would be a strong indicator of markets being overbought.
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