Indices to Watch March 11, 2024

MyCompass Trading's Indices to Watch Report for Marc 11, 2024 has been released. The indices are $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 1-Week Trial, to receive the Stocks to Watch List.

SPX: The index got to the top of the strong rising channel on Friday on job numbers. It traded to new ATH before reversing and selling off, closing down on the day. It is not surprising that profit-taking has set in. Support around 5050. This recent move since last November is just wave 3 of a 5-wave move to the upside. There is still lots of money sitting on the sidelines waiting for the recession that has never shown up. A new technological revolution will continue to drive markets higher for at least another 2 to 3 years. The bull market is well entrenched with inflation coming down and the US economy very strong even with the current interest rate environment.

NDX: The index also made a new ATH on Friday but closed down 1.5% on the day. Support for NDX around 17800. The index is in wave 3 of a 5-wave move to the upside. The AI revolution will continue to fuel the mega-caps as our next target is 21000 (after tagging our 18000 target). The party has just begun. There are many years left for these markets to run.

DJIA: The Dow, after trading to the top of the channel 2 weeks ago, has sold off to the bottom-rising channel line. It is wedging in here and probably needs 3 or 4 more days to decide if it will continue its trend higher or trade to the downside. The economy remains strong, with interest rates looking to fall later this year. That should continue to fuel the value stocks. I am looking for the next level on the Dow around 41000.

DJTA: The transportation index continues to form an ascending triangle (bullish). It is just under key resistance around 16000 and 16175. The DJIA is lagging the other major indices and needs to catch up to confirm the new highs set by the Dow and SPX. For now, it is somewhat of a negative divergence as you need a strong transportation sector if the economy is to stay strong. I think it is just a matter of time before the index catches up to the rest of the markets.

IWM: The Russell 2000 ETF has broken out of a 2 year range and trading up to key resistance at $210. This move is a strong breakout for the broader markets. Over $210 and it will be a strong confirmation for a continued move higher. I would expect the IWM to trade to ATHs this year and then to around $300 over the following 2 years. Chart is very bullish.

FAS: The financial sector ETF (swing trade from $67) continues to trend higher in a strong rising channel. It has broken out over key resistance at $92 and continues to grind higher. Next targets are $110 and $120. I would expect the ETF to tags these levels by this summer. Chart is very bullish.

LABU: The biotech ETF broke the long-term declining tops line at the end of 2023 and has powered higher ever since. Recently it broke out through key resistance at $143 area and is now bull flagging. It has pulled back to hold support at the $143 level. Look for LABU to continue to trend higher with $225 the next level most likely before summer. Chart is very bullish.

SMH: Huge reversal on the semis on Friday down 11.37% as profit-taking set in. The chart was going parabolic so, not surprisingly, we get a sharp reversal. The ETF could pull back to $207 and still be in a strong bull market. Perhaps a fourth wave consolidation over the next month would set the ETF for the 5th wave move to $300. Chart remains bullish.

GUSH: The oil E&P stocks has traded up through its 200 dma and right at $35 resistance. The major resistance is at $37 though (long-term declining tops line). If it can get through $37 then $41 is the next target. The break over $37 could signal a change in direction for the sector. For now, the chart remains bearish.

NUGT: The gold miners are finally catching on that bullion is trading at ATHs. After double bottoming at $23 area the last week the ETF surged over 40%up to the 200 dma. Key resistance levels at $32 and $34. Through those levels and that should signal a change in direction for the sector. Technically, the chart is bearish but with the strength of the commodity, we should see a bull signal flash here over the next month.

Technical Indicators: 60.3% of stocks are above their 40 dma and the McClellan Oscillator sits at 49.35. VIX remains very bullish at 14.74 (no fear in the mega-caps). The broader market is neither overbought nor oversold. The indices are midrange of their rising channels so, on the short term, markets could go either way. But, overall, there is lots of energy available for the uptrend to stay intact.