On Tuesday, we talked about the Coinbase (COIN) public listing and how waiting for the dust to settle would be a good plan, as there is no prior price action or history to base projections from a technical standpoint. The plan turned out to be correct, as Coinbase's initial rally turned into a selloff for most of its trading day.
However, Coinbase will continue to have increased volatility in the coming weeks, as a days' worth of price action does not provide much data for investors and traders to work with. This means that traders will have to plan with a short-term mindset based on the range of the first day, or continue to wait for the chart to develop.
Wednesday was a big day not only for the crypto space, but also for the Russell 2000 (IWM), which initially had a large rally but eked out a close just over its 50-day moving average at $222.84. With next resistance at $226.69, it will need to clear this level if it wants to get back on track to new highs. If it does clear $226, it will show improved momentum back over the 50-DMA, along with its ability to follow the other major indices, including the Nasdaq 100 (QQQ), Dow Jones (DIA) and the S&P 500 (SPY), which all linger around new high territory.
With that said, the QQQs should be watched, as today they closed under the prior day's low and therefore could be looking for a potential pullback if Wednesday's move continues into Thursday.
- S&P 500 (SPY): Holding near highs. Support 407.21 the 10-DMA
- Russell 2000 (IWM): 219.39 support. Resistance 226.69
- Dow (DIA): 333.43 support
- Nasdaq (QQQ): Support 332.32 the 10-DMA
- KRE (Regional Banks): Support 65.49
- SMH (Semiconductors): Resistance 258.59.
- IYT (Transportation): 257.73 support
- IBB (Biotechnology): 145.69 support
- XRT (Retail): Needs to clear 93 then 96.27. 10-DMA support area.
Assistant Director of Trading Research and Education