Mish's Market Minute

Major Index Support and Resistance Levels

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Last Thursday, the S&P 500 (SPY) and the Nasdaq 100 (QQQ) tested new highs and then gapped lower on Friday, showing that the market still had some overhead resistance. Driving reasons could be related to fears of inflation raising, as the U.S pushes to take on more debt, to caution from pending earnings, as Monday starts another round of incoming reports. Additionally, the Russell 2000 (IWM) has pulled off and could be looking for another revisit of its 50-day moving average at $223.28.

With that said, we can also factor in the major indices' current price range. In the above charts, each has a range created by their recent highs, lows or, in the case of IWM, support from 50-DMA. This can give us clear support and resistance levels to reference and trade-off in the coming week.

Also, when it comes to using these price levels to determine a potential breakout or breakdown in the market, it can help to watch if the indices are pushing through the price levels at the same time. This can help with fake breakouts or breakdowns, like we saw this week in SPY and the QQQs.


ETF Summary

  • S&P 500 (SPY): 10-DMA at 416.24 pivotal
  • Russell 2000 (IWM): Next support the 50-DMA at 223.26
  • Dow (DIA): 336.75 support
  • Nasdaq (QQQ): 333.97 support
  • KRE (Regional Banks): Support 67.22
  • SMH (Semiconductors): 242.29 support the 50-DMA
  • IYT (Transportation): Closest support the 10-DMA at 265.98
  • IBB (Biotechnology): 153.51 pivotal
  • XRT (Retail): Like this to hold over the 10-DMA at 92.41


Forrest Crist-Ruiz

MarketGauge.com

Assistant Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
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