Indices to Watch March 18, 2024

Indices to Watch March 18, 2024

SPX: The index is consolidating near ATH but coming under pressure, with US Treasury yields on the rise. The 10-year bonds are near their previous highs of 4.4%. If treasuries trade much above that level, most likely we will see a pullback in the market. But for now, the index remains in a strong rising channel and is bullish. A break over 5200 would show continuation for markets. Support at 5100 and 5050.

NDX: After a reversal day last week the NDX is wedging finding support on the 20 ema. It has resistance now at 18060 and the ATH of 18416. The index remains in a strong rising channel, and perhaps it is forming wave 4 of a 5-wave move to the upside. It has traded to our 18000 target we mentioned last November. 21000 is the next level, probably this year.

DJIA: The Dow remains in a strong rising channel, finding support on its 20 ema. It is on the rising bottom line forming a bull flag. Key support around 38400. Targets are still 41000 for this year.

DJTA: The transportation index continues to wedge, finding support on its 200 dma. There is lots of overhead resistance around 16000. There is a negative divergence between the DJTA and the SPX/Dow. It needs to trade above 16200 to show continuation. A strong transportation sector is a key component of a strong economy. For now, the index is neutral and could go either way.

IWM: The broader market ETF broke out of its 2 year consolidation pattern over the $200 level. It did get rejected at key resistance of $210 last week. The chart is bullish but it really needs to get through $210 to show a strong continuation for the broader market. Chart is bullish.

FAS: The financial sector ETF remains in a strong rising channel, having broken out last November where we put a swing on at $67. For now, it is holding the rising channel line and the 20 ema. $110 and $120 are our next targets. Below $96 would not be good for markets.

LABU: The biotech ETF is sensitive to the rising interest rates and has pulled back from its strong move to $177. I am looking to re-enter a swing trade if it pulls back to the $110 area. The chart is bullish, but for now it looks to trade lower. Below $105 would be negative for the sector.

SMH: After going parabolic, the semiconductor ETF has pulled back to support around $214. It has made a powerful 3 wave move up, and perhaps this is the start of wave 4 before trading to our $280 target in wave 5. Chart remains bullish but most likely consolidates in here for a few weeks.

GUSH: The oil E&P ETF broke through the long-term down-trending tops line and through key resistance at $36.65. The 50 ema is about to cross up through the 200 dma (bullish golden cross). The chart has finally turned bullish and we initiated a swing trade today on the ETF. Back below $34 would be negative. Near-term targets of $42 and $48.

NUGT: The gold miner ETF is struggling at the 200 dma and the long-term declining tops line. It is surprising that the miners are not stronger with gold bullion trading at ATHs. It needs to get through $34 to show a change in direction. For now, the chart remains bearish.

Technical Indicators: The broader market indicators are neutral. 51.8% of stocks are above their 40 dma and the McClellan Oscillator sits at -24.48. VIX remains very bullish at 14.33. Markets are neither over bought nor over sold. But it could go either way on the short term.