Will the Market Pick a Direction On Monday?

April 14, 2022

Mish's Daily

By Mish Schneider

Written by Forrest Crist-Ruiz

On Wednesday we questioned if the stock market was setting a trap for traders by having a strong close for the day near resistance areas.

Then on Thursday the market reversed closing down on the day.

Maybe we were onto something?

Now we wait through the long weekend to see if the indices continue lower.

Having said that, with such a choppy market, we need to stay on our toes as we’ve seen the indices continue to flip back and forth.

When the indices are tough to read, it can help to watch other symbols like High Yield Corporate Debt (JNK) and S&P 500 VIX Short-term Futures (VXX).

JNK shows us investors' appetite for risk while the VXX shows short-term volatility in the market.

More importantly, these symbols are trading near pivotal price levels that can give us clarity on the market come Monday.

In the above chart, we can see that VXX is holding over both its 50 and 200-Day moving average.

If the market is looking to break lower this will be ready for a move higher on Monday, however, if we see more hesitation or a rally across the board, VXX should break its $24 support area.

On the other side, while JNK is looking heavy, it is still holding over its recent low of $99.14 and support from 3/14 around $99.43.

Watching both can give us a clear idea of what is happening based on each breaking or holding these price levels come Monday.


ETF Summary

S&P 500 (SPY) 440 pivotal.

Russell 2000 (IWM) Failed to clear 201.

Dow (DIA) 343 pivotal.

Nasdaq (QQQ) 338 minor support.

KRE (Regional Banks) 66.85 to clear.

SMH (Semiconductors) 237 support.

IYT (Transportation) Watch to stay over 243.

IBB (Biotechnology) 128 support.

XRT (Retail) Needs to clear 77.14 and hold.

GLD (Gold) Like this to hold over 181.

USO (oil) 78.70 to hold.

DBA (Agriculture) 22.39 to hold.

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