S&P 500 and the Other Indices Still in Tight Range

After inside days in three of the four indices, Monday traded in an even tighter range. This made for some choppy trading conditions in the indices and many stocks.

Again, we have a good technical setup as the DIA, and the Russell 2000 had inside days from Friday's trading range. Plus, the S&P 500 and NASDAQ could not take out last Thursday's highs.

Referring to our outliers first-

• LQD, or High Yield Investment Grade Bonds, stayed green all day and now, closer to resistance, must hold 123.60.
• Junk Bonds (JNK) had an inside day, giving us a clearer range to watch between 95.98 and 92.00.
• Oil (USO) broke last week's low but held 4.00. The overall sentiment remains weak.
• Regional Banks (KRE) tied to oil, held support at the 10-DMA and closed only marginally red.

For Tuesday, we want to see the outliers hold support. In addition, we want to see the indices clear last Thursday's highs (see ETF commentary).

Otherwise, the recent upward momentum, following the unprecedented government and Fed stimulus, could be running out of steam.

• S&P 500 (SPY): Range to watch 249.05-262.80
• Russell 2000 (IWM): Range to watch-110.80-117.60
• Dow (DIA): 2 inside days range 214.01-225.87
• Nasdaq (QQQ): Range to watch - 183.61-192.72
• KRE (Regional Banks): Range to watch 31.65-34.73
• SMH (Semiconductors): 120 resistance with 115 support
• IYT (Transportation): 144 resistance and 132.50 support
• IBB (Biotechnology): 110 resistance and 105 support
• XRT (Retail): 29.35 has to hold and 31.65 resistance to clear
• Volatility Index (VXX): A move closer to 43 would be a low-risk buy

Mish Schneider

MarketGauge.com

Director of Trading Research and Education