March 6, 2019
By Mish Schneider
Yesterday, I focused on NASDAQ and many names within the QQQs index that had had its share of fun.
But for the more important macro indices, keeping them green with the Russell 2000 IWM and Transportation IWT weak, presented issues.
Weak small caps and Transportation combined, will statistically lead to selling everywhere.
Hence, IWM got crunched, more so than any other index.
The QQQs though, remain above all moving averages on all timeframes.
Despite the red day, QQQs outperformed, which has a lot to do with the strong runs in Netflix and Facebook today.
Turning our attention to the S&P 500 SPY, yesterday the price posted an inside day. (When the trading range is within the trading range of the day prior).
As SPY made a new multi-month high on Monday (281.87), it’s low price of the day (276.84) became a key level to hold today.
With IWM already below two major moving averages (50-WMA, 200-DMA), will SPY’s symbol change to RIP?
Note the contrast between the two indices.
IWM is well below the 200-DMA while SPY is nearly $3.00 above its 200-DMA.
Plus, the SPY held the outside day low or 276.84.
For Thursday, should SPY continue to hold 276.84, 153 becomes the pivotal level for IWM.
If IWM holds and rallies from there, I’d suspect we will see more aggressive buying in SPY and QQQ.
That should keep the grim reaper at bay for now.
However, if SPY breaks 276.84, or gaps below that level, then we will hereby have a darker instrument to trade-RIP!
S&P 500 (SPY) 281.87-276.84 the range to break one way or another.
Russell 2000 (IWM) 153 the immediate support to hold. Unless it gets back over 155.59, that’s temporary support.
Dow (DIA) Exactly like SPY, after an inside day, this held the support at 256.20. Only DIA did have a topping pattern already on 2/25.
Nasdaq (QQQ) 174.55 super pivotal tomorrow-especially on a closing basis.
KRE (Regional Banks) Broke 56. Best underlying support at 54.30
SMH (Semiconductors) This also had a topping pattern. Unless it can clear first line of resistance at 103.75, looks like 100.50 is where its best support sits
IYT (Transportation) 184.70 support then 183.80. 186.40 resistance then 188.85.
IBB (Biotechnology) Broke the 200 DMA so now must hold the 50-WMA at 110
XRT (Retail) 45-46 the trading range to break near-term
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