Is The Stock Market Gaining Or Losing Momentum?

Three of the four major stock market indices including the S&P 500 (SPY), Nasdaq 100 (QQQ), and the Dow Jones Industrials (DIA) inched to new highs, while the Russell 2000 (IWM) struggles in its current price range.  

It is important for IWM to keep pace with the other indices, for it shows a large selection of small-cap companies which tend to better reflect the overall market picture. 

This is especially true throughout the pandemic which has seen smaller businesses struggle more while larger time-tested businesses had the capital to weather the pandemic. 

Additionally, If IWM continues to chop within its current price area, we could be seeing a divergence between large-cap and small-cap companies. 

stock market index etfs rally higher end july positive buy signal investors image

Above is a chart of the 4 major indices with our proprietary Real Motion indicator. 

The recent rally to new highs has pushed the S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) close to their 200-period moving average (green line) while IWM has yet to clear over its 50-PMA (blue line).

One interesting thing to note is how the Dow Jones Industrial Average ETF (DIA) cleared to new highs along with QQQ and SPY in price but has yet to clear over its 50-PMA like IWM.

This could be showing that this recent push to new highs is losing momentum. 

With that said, If the other major indices continue upwards without IWM this could show there’s an underlying problem in the market, and we should be cautious. 

Especially if IWM cannot clear its 50-PMA on Real Motion.

Stock Market ETFs Trading Analysis & Summary:

S&P 500 (SPY) New all-time highs.

Russell 2000 (IWM) Like this to hold over 216.91.

Dow Jones Industrials (DIA) 351.09 resistance cleared. Watching to hold it.

Nasdaq (QQQ) New highs but lower average volume. 

KRE (Regional Banks) Holding downward trend. Needs to break the 10-DMA at 62.27 for 2 consecutive days.

SMH (Semiconductors) Holding over the 10-DMA at 254.14.

IYT (Transportation) Minor support the 10-DMA at 255.47.

IBB (Biotechnology) 157.11 main support area.

XRT (Retail) 94.84 support the 50-DMA.

Twitter: @marketminute

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.

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