The Bulls Are Back In Town

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After two days of testing support areas the market rebounded.

For the ‘buy the dip’ traders, the location of the recent lows sense was a good reason to go long today, but for investors looking for a more substantial correction, they’ll have to wait.

13 out of the 14 sectors we monitor in Big View, and all of the Modern Family members rallied today, so by this measure it was a healthy bounce.

Every big move doesn’t start with a big bang, and today’s volume was generally light. However, the gap over the prior day’s high with no meaningful intra-day retracement is a bullish pattern.

Additionally, rebounding with a gap off the current support levels sets up technically as a nice way for another rally to begin.

The next step is to watch for key signs of continued strength in order to stick with a buy the dip mindset.

The SPY and QQQ both closed back over their 50-DMA and 10-DMA. Bulls should look for the market to continue to close over both of these levels. They both have good support under their averages, but if the market has turned right now, then I’d expect the DMAs to hold.

The DIA never closed under its 50-DMA so I’d expect it to close over its 10-DMA tomorrow or the next day and hold above it.

The IWM needs to get over 137 to clear its 200 and 10-DMA. This may take a few days even in a bullish environment, and if the SPY and QQQ move higher I expect it will

However, if IWM can’t clear 137 on a closing basis in the next few days it will be a red flag for the bulls.

Another simple measure to apply to all of the major index ETFs is that if they are back in a bullish mode then they will not trade below the low of the prior day and their 30-minute opening range. If they do, then it’s time to doubt the bulls.

Until then, the bulls are back in the driver’s seat.

S&P 500 (SPY) Support in 245-248.80 area. Resistance 246 and 246.50

Russell 2000 (IWM) Support at 135.75 and then 135.50 and 135. Expect resistance at 137.00-.20.

Dow (DIA). May find support around 218. Gap fills at 217.  Expect resistance around today’s high then big resistance at 220.

Nasdaq (QQQ) Look for support around 142.75 then 142. Gap fills at 140.18. Resistance 144.00-.40

KRE (Regional Banks) Support around 51.50. 54.00 is major resistance.

SMH (Semiconductors) Range bound – 84 to 88. 85 is good support.

IYT (Transportation) Must hold Friday’s low (163.47). 162 then 160 are next support. Next big resistance is at 168.

IBB (Biotechnology) The big areas to watch are 300 below and 312 above

XRT (Retail) The 38 level should be support now. Needs to get over 39 for starters.

IYR (Real Estate) Still stuck in a big range. Short-term key levels are 78.70 support and resistance at 81.

XLU (Utilities) Another new high. Support at 54.40 and 53.60.

GLD (Gold Trust) Key levels to break are 122.80 and 123.50. Over that it runs. Look for support at 120.50.

GDX (Gold Miners) Same idea as GLD. Key levels to break are 23.25 and 23.50. Look for support at 22.30-.50

SLV (Silver) 16.30 clears key high and the 200 DMA. 15.50 area is support.

USO (US Oil Fund) Tight consolidation. Oil inventory data tomorrow. Still looks like a base.

UNG (Natural Gas) Still in a bear trend according to phases. If it has a 30-min Opening Range breakout over 6.75 it could indicate a multi-week bottom. The all-time low is 5.78, the weekly base high is 9.80. So the risk is just over a $1 and the first target is just over $2, but if it breaks $10 then $12 is the next stop.

KOL (Coal) Big close over 14.80 today. Watch this for general support for any rally in USO and UNG. Note the high after the election of President Trump has been the defining resistance level. A break above it could be the ‘secret’ tipping point to a rally in the energy complex. Watching for a break over 14.90.

TAN (Solar Energy) 22.00 resistance and 21.00 support. That’s all you should focus on.

TLT (iShares 20+ Year Treasuries) Expect support at 126.00 Should not break 124.50. Big support at 124. Resistance at 127.15.

UUP (Dollar Bull) This is simple and big. 23.96 to 24.20 is the low zone of a multi-year range. Look at your weekly charts for any close over a prior week’s high that is over 24.20. Until then, stay away.

FXI (China) has to hold 41.50 on a closing basis. Bullish if it closes over 42.80.

EWW (Mexico) It looks good. Should hold 56, stop under 55.30.