Indices to Watch February 20, 2024

SPX: Markets were softer on Friday, double topping around 5040 on inflation numbers and housing starts. The index is mid-channel of a large rising channel so, on the short term, could go either way. But overall, markets are very strong. Support for SPX around 4945. Strong support at 4800. It appears to be in the 4th wave inside the larger 3rd wave of a 5 wave move to the upside. The near-term top should be around 5200. Overall, the chart is very bullish.

NDX: On Friday, NDX pulled back to test support at 17640 area (lateral support, rising channel line and 20 ema). This could be the top of wave 3 of a major 5 wave move to the upside. Maybe markets consolidate in here (especially ahead of the NVDA earnings report). Good numbers should propel the index to the 21000 area over the next 6 months. Chart is very bullish.

DJIA: After breaking out to new ATHs at the end of the year the index consolidate for 2 weeks and then started to march higher, trading to new ATH last week. It is mid-channel of a strong rising trend so on the short term, could go either way. Support 38200 area. Targets 41000.

DJTA: The transportation index came under a lot of pressure last week, failing to break out over key resistance at 16,180. It has pulled back to the rising channel line. It remains a negative divergence from the SPX and DJIA with a non-conformation of the other indices trading to new ATHs. Key resistance levels at 16200 and 16750. A move over 17070 would be a Dow theory buy signal.

IWM: The Russell 2000 ETF has broken back over the 2-year consolidation pattern, finding support at $200. It did double top at $205 from the end of the year move. It now needs to get through $210 to really show a major change in direction for mid and small-cap stocks. I would expect IWM to be trading over $210 and to $220 by this summer. A technological revolution is ensuing and will propel markets much higher over the next 2 years.

FAS: The financial sector ETF has broken out a 2-year consolidation pattern, trading over $92. It is in the internal 5th wave of a major 5-wave move to the upside. Look for this next move to take FAS to $100, $106 and $110 before the end of June. Chart is bullish.

LABU: The biotech ETF has broken out of a bull flag pattern to the upside. Look for it to test $142 and $153 on this next leg up. The 50 ema has crossed up through an up-turning 200 dma (bullish). Look for LABU to test $265 before the end of the year.

SMH: The semiconductor sector is so strong trading up close to our $210 target from last November. It may be topping here, forming a wave 4 of a 5 wave move to the upside. NVDA earnings will be critical to whether the move can be maintained. Support $196 and $185.Over $210 and $240 is the next level. Chart is very bullish.

GUSH: The oil stock ETF broke through a short-term declining tops line and traded up to its 200 dma. There is a lot of overhead resistance between here at $32 and the long-term declining tops line at $37. It is mid-range of a consolidation pattern between $29 and $35 so could go either way on the short term. Over $37 could signal a change in direction for the oil stocks. Overall, though, the chart remains bearish.

NUGT: The gold miner stocks found a double bottom around $24. It traded up near resistance at $26.50. But most likely it gets rejected there and trades back to the $21 level. Chart remains bearish.

Technical Indicators: 49.25% of stocks are above their 40 dma and the McClellan Oscillator sits at 44.91. VIX remains very bullish at 14.24 (no fear in the mega-caps). The broader market is neither overbought nor oversold. It has lots of energy available to take another run at the all-time highs. Markets are very bullish.