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Indices to Watch September 5, 2023

Indices to Watch

The markets were closed Monday for the Labor Day holiday. What does Robert Knight see in the major stock indices for the rest of the week? In this report, he discusses $DJIA, $DJTA, $FAS, $GUSH, $IWM, $LABU, $NDX, $NUGT, $SMH, $SPX, and Technical Indicators. 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 September 5, 2023

SPX: From middle March the SPX made a 1st wave (5 wave internal) move up to a high of 4600. Over the last month it had a 3 wave corrective move to support around 4350. From there it bounced and to confirm an Elliot Wave theory it must trade over 4600. Through 4600 and we should see SPX tag ATHs most likely by year end in wave 3. ATH resistance will result in a 4th wave pull back. Then the 5th wave will take the markets to new all-time high levels next year. Chart is bullish.

NDX: The NDX made a massive 5 wave move up off a double bottom around 10500 in wave 1 of a longer term strucutre. The last 6 weeks we had the wave 2 corrective phase. In mid-August it held the rising channel line and lateral support around 14700. It has not started wave 3 that needs to trade up through 16000 to confirm. Look for wave 3 to take the index to 16500 or 17000 before a wave 4 pull back. Wave 5 will take us through to new ATH levels.

DJIA: The Dow made an 8 month reverse H&S pattern. In July it broke through the neck line and traded to resistance around 35825. We had a 4 week pull back to the break out level where it held. It is now in a rising channel. Look for Dow to test ATH before year end. Chart is very bullish.

DJTA: Trannies also came off a massive 12 month revers H&S pattern breaking the neckline around 15280. It traded to resistance around 16700 and pulled back to support. Look for Trannies to make new ATH by year end. Chart is bullish.

IWM: The broader market remains in a 14 month trading range mostly between $170 and $200. On the recent pull back it held the 200 dma and trade back through key resistance at $189. If the mega caps continue their push to all time highs, the broader market should get dragged along. Over $200 would be a very powerful range break move. Most likely trades over that level before year end as it continues to make higher lows.

FAS: The financial sector ETF is coming into the apex of a large wedge pattern. It is hemmed in by a long term declining tops line and just under its 200 dma. Probably needs to get over $75 to really show a change in direction. Chart is neutral at the moment.

LABU: The biotech ETF is at the top of a declining channel. But in mid-August it did hold the $4.25 triple bottom level. Next resistance, if it breaks out of the channel, is $5.40, then $6. It is in a massive 15 month consolidation pattern. Support $4.25. Break out level $7.75. Whichever way it goes, it should be a powerful move after such a long period of consolidation. Chart is neutral at best.

SMH: The Semis are in a strong rising channel but double topped the $160 area. $160 will be formidable resistance for it. But with the resilience of the economy, I think this trades through ATHs and continues in a strong trend for the next 2 to 3 years. Below $143 would very negative for markets.

GUSH: Saudi continues to restrict supply and Russia has agreed to reduce their supply by 500k bbl/day. As such, the commodity price continues to strengthen. GUSH has broken out of the bear flag it was forming The 50 ema has crossed up through the 200 dma (golden cross). It is at resistance at $42. but looks like it is headed to $50. Stop under $37. Chart remains bullish.

NUGT: The gold stock ETF is in a down trending channel with a move off the bottom of the channel and lateral support around $28. It has moved back near the top of the channel and failed. Through $28 and it trades to $27 and maybe $22. Over $35 is moving out of the channel but massive overhead resistance for the stocks now. Chart is bearish.

Technical Indicators: No fear in the market with VIX at 13.09. The broader market is neither overbought nor oversold. 43.4% of stocks are above their 40 dma and the McClellan Oscillator sits at 82.43. Strong bias to the upside and lots of energy available to take stocks through the next resistance levels.

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Indices to Watch

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