After inside days in three of the four stock market indices, Monday traded in an even tighter range.
This made for some choppy trading conditions in the indices and many stocks.
Again, we have a good technical setup as the Dow Jones Industrial Average and the Russell 2000 Index had inside days from Friday’s trading range.
Plus, the S&P 500 Index and NASDAQ could not take out last Thursday’s highs.
Referring to our outliers first:
The High Yield Investment Grade Bonds (LQD)stayed green all day and now, closer to resistance, must hold 123.60.
Junk Bonds (JNK) had an inside day giving us a clearer range to watch between 95.98 and 92.00
Oil (USO) broke last week’s low but held 4.00. The overall sentiment remains weak.
Regional Banks (KRE) tied to oil, held support at the 10-DMA, and closed only marginally red.
For Tuesday, we want to see the outliers hold support.
And, we want to see the indices clear last Thursday’s highs (see ETF commentary).
Otherwise, the recent upward momentum after the unprecedented government and Fed stimulus, could be running out of steam.
S&P 500 (SPY) Range to watch 249.05-262.80
Russell 2000 (IWM) Range to watch-110.80-117.60
Dow (DIA) 2 Inside days range 214.01-225.87
Nasdaq (QQQ) Range to watch-183.61-192.72
KRE (Regional Banks) range to watch 31.65-34.73
SMH (Semiconductors) 120 resistance with 115 support
IYT (Transportation) 144 resistance and 132.50 support
IBB (Biotechnology) 110 resistance and 105 support
XRT (Retail) 29.35 has to hold and 31.65 resistance to clear
Volatility Index (VXX) A move closer to 43 would be a low risk buy
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The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
