Today the QQQs, SPY, and DIA, closed near the September 21st lows which we noted as possible support.
While we rallied intraday, we also sold off, giving back most of the days upward progress.
The VXX also failed to break through the 50-DMA to the upside, but It's still over prior days low and could be poised to test the moving average again.
Buyers came back for JNK today bringing it up to the 200-DMA, which it did not hold. Now it sits under the prior days close.
With current market conditions looking weaker, we could see a breakdown for lower levels, which is why I'm watching a solid break below the September 21st lows.
We should also consider that there are only 39 days left until the presidential election. Soon, debates will be held discussing future polices, therein shaping the minds of what emerging trends people should begin investing in. This could make for an even choppier market environment going forwards. Combined with possible consolidation in this area, we can expect more large volatile days.
Our ongoing theory that a continued selloff could create a timelier push for the stimulus bill being passed is still on my mind. Waiting for some good news to come in and save the market isn't out of the question - it could just be a matter of when. Knowing the stimulus bill could have a negative impact on this coming election gives more pressure for it to be passed in these upcoming weeks.
For now, we should hold tight, watch our key levels, and keep eyes on the VXX and JNK.
- S&P 500 (SPY): Still holding over 322 support. If breaks 310, next major support level
- Russell 2000 (IWM): Almost where it started. Still needs to break and hold over 200-DMA
- Dow (DIA): 263 support, but first we have the 9/21 lows
- Nasdaq (QQQ): 260 key, then 233 the 200-DMA
- KRE (Regional Banks): Trying to hold 34, but could see 32 next
- SMH (Semiconductors): Holding 164; 169 resistance
- IYT (Transportation): 195 support
- IBB (Biotechnology): Broke 132, watching for a continuation down to 126
- XRT (Retail): If can't move up past 50, then watching for a move lower to 45
Mish Schneider
MarketGauge.com
Director of Trading Research and Education
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
