The S&P 500 (SPY) and the Nasdaq 100 (QQQ) continue to trek upwards, along with the Dow Jones (DIA). While the DIA and QQQ still need to clear their 200-DMA, the 4th major index is flashing a warning sign.
When watching the major index, it is always important to note when one is straying away from the pack. Moves where all 4 are aligned can be powerful and show that the overall market is in an agreement. With that said, the small-cap Russell 2000 (IWM) does not agree with the rest of the pack, as it has yet to clear key resistance over $209. Therefore, along the 200-DMA sitting as the next resistance point for QQQ and the DIA to clear, we need to watch for IWM to clear its double top of $209.
If these levels are not cleared, this would show weakness and a possible retracement towards the 50-DMA (blue line) in the indices.
On another note, volatility through the S&P 500 VIX (VXX) has shown its ability to hold over the 200-DMA (green line).
While the recent spikes in price have failed to hold, as seen on Mondays and 3/15, the VXX is still holding its major moving average.
This shows we should be extra cautious, as the VXX, which tends to move inverse to the indexes, is standing its ground.
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ETF Summary
- S&P 500 (SPY): Resistance 458.
- Russell 2000 (IWM): 209 to clear.
- Dow (DIA): 350 resistance.
- Nasdaq (QQQ): 348 to hold. 368 to clear.
- KRE (Regional Banks): Rangebound with 72 to clear and 69 to hold.
- SMH (Semiconductors): 268 support.
- IYT (Transportation): 270.60 needs to hold.
- IBB (Biotechnology): Watch to hold the 50-DMA at 127.79.
- XRT (Retail): 80 resistance.
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
