On Friday the 11th, the QQQs (Nasdaq) and IWM (Russell 2000) both closed under the 50-DMA. They were not followed by their friends the DIA (DowJones) and the SPY (S&P 500). The temporary divergence they were in has quickly been resolved because all four are now back over the 50-DMA.
Let's check out what could have helped them increase today.
Hopeful news from Pfizer (PFE) was released today about their COVID vaccine, stating that by the end of October they will know if it works, and, pending the FDA, could be released by the end of this year. News like this finally woke up IBB (Nasdaq Biotechnology ETF), who has been trending down since the July high of 146.53. IBB gapped up and increased over 5%, falling 84 cents shy of the 50-DMA.
NVDA (Nvidia Corp) bought Arm Limited to help them propel their R&D capacity, thereby helping NVDA build an AI supercomputer. Gilead (GILD), a research-based biopharmaceutical, bought Immunomedics, giving Gilead access to their cancer treatment drug called Trodelvy.
Anticipation of the Fed meeting this Wednesday and their continued dovish stance is also boosting investor confidence. A two-day close over QQQs and IWM would get us back into a bullish phase and back on track, with the fresh hope of vaccines coming by the end of 2020. However, should Monday's gains falter, watch the very important 50-DMA in both to hold.
Last week, Mish also talked about TECK and the coal industry. TECK (Resources Limited) has made over a 15% move in the past two days.
- S&P 500 (SPY): 338 now support
- Russell 2000 (IWM): 150.75 now support
- Dow (DIA): 280 pivotal
- Nasdaq (QQQ): In an unconfirmed bullish phase; 275 pivotal
- KRE (Regional Banks): 38 now support
- SMH (Semiconductors): Has to hold 167.51 the 50-DMA
- IYT (Transportation): 200 pivotal and 203 resistance
- IBB (Biotechnology): 130 now key support
- XRT (Retail): Has to clear 51.20
- Volatility Index (VXX): Went south even more than the market did
- Junk Bonds (JNK): 104.50 now critical support
- LQD (iShs iBoxx High-Yield Bond): 135.60 support to hold
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
