Bulls Try To Lift Stock Market, Feels Like Fallen Boulder

Michele Schneider

The NASDAQ and many names within the PowerShares QQQ Nasdaq 100 ETF (QQQ) had fun today.

But for the more important macro stock market indices, keeping them green was like trying to lift a fallen boulder.

An aside, this boulder looks a bit like a pig-our pig Mr. Ham. See yesterday’s blog.

We have been here before. 

The Russell 2000 (IWM) and Transportation Sector ETF (IYT) begin to fade, while the money gleefully enters the NASDAQ / QQQ and FAANG stocks.

And just like the adage “rinse, wash, repeat”, the bulls think that the QQQs will lead the market up.

With IWM and IYT weaker, is it possible to raise the boulder?

IWM had an inside day today.

IYT almost did until it dumped right at the end of the day.

In IWM, inside days signify uncertainty and a pause in the action.

Interestingly, QQQ , SPY and DIA also all had inside days.

So, the buying in Google, Facebook, and Amazon, seems out of step.

The inside days in IWM and weakness in IYT interest me most. 

In IYT, if the price stays below 186.40, after it has already failed the 50-WMA and the 200 DMA, could put more pressure on the market.

IWM also failed the 50-WMA and the 200 DMA. Under 155.59, just like with IYT, renewed selling pressure seems inevitable.

The only way IWM and IYT get saved if you will, is if they reconcile to the upside. (IWM clears 158.77 and IYT clears 190.53.)

Where does that leave NASDAQ?

Perhaps like that piggish-looking fallen boulder, grounded for a very long time.

S&P 500 (SPY) – Inside day. 279 pivotal. 281.31 swing area resistance must clear. 

Russell 2000 (IWM) – Inside day

Dow Jones Industrials (DIA) – Could not clear 262.36, so working a topping pattern and put in a much nastier bearish candle than SPY did with an inside day.

Nasdaq 100 (QQQ) – Inside day. 172.47 support. 173.50, and 175.79 resistance.

KRE (Regional Banks) – 56.75 now the point to get back above with 56 support to hold

SMH (Semiconductors) – Until 106.27 clears though, it is still working off a topping pattern with 102.50 support to hold.

IYT (Transportation) – Keep 189.61 in your mind as the ultimate weekly pivotal level to hold or not. 

IBB (Biotechnology) – 112.40 the place to hold

XRT (Retail) – 45 to 46 the trading range to break near-term

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