The Russell 2000 (IWM), Nasdaq 100 (QQQ), Dow Jones (DIA) and the S&P 500 (SPY) all have the potential to make large moves Monday, if these broad stock market indices clear their resistance levels together.
This month, the SPY, QQQ, and DIA have made substantial gains.
Currently these stock indices are close to making new highs. Additionally, each has resistance from a prior high created on Friday, April 16.
However, IWM never made a move back towards all-time highs and has spent most of April struggling to hold over the 50-Day moving average at $222.98. On Friday, IWM came close to clearing its monthly high at $226.69 but missed by 5 cents!
This makes Monday a pivotal day for the small cap sector as clearing the 226.69 price level will mean that IWM is finally looking to get back on track towards its all-time high price at $234.53.
This would also be a great sign for the other stock indices that could use the boost of a Russell 2000 breakout to push themselves higher.
It should also be noted that because IWM spent most of its time trading sideways this month, it has the most potential for an explosive move higher when compared to the other indices. If the situation lines up, we could have a great continuation from Friday’s bullish close.
With that said, we should be carful to set such high expectations as the market plays by its own rules.
This means that for Monday, we should look not only for a break of these key resistance points, but also for a large push in momentum through them.
Some of the best breakouts can be confirmed with large amounts of volume to back them up.
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ETFs Trading Analysis and Summary:
S&P 500 (SPY) Needs to clear 417.91 and hold.
Russell 2000 (IWM) Resistance 226.69
Dow (DIA) 342.43 resistance.
Nasdaq (QQQ) 342.23 resistance.
KRE (Regional Banks) Needs to clear 68.43 Aprils highs.
SMH (Semiconductors) Holding over 242.59 the 50-DMA.
IYT (Transportation) New highs.
IBB (Biotechnology) Second close over 50-DMA at 154.65 confirms bullish phase.
XRT (Retail) Cleared recent high of 93.33.
The author has a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.