Inflation pressures take the medias focus this week.
Nevertheless, we must remember the news does not always align with market price.
With that said, prices are holding near highs in the major indices. This is a positive sign as investors are looking for a continuation in trend or consolidation.
However, lower amounts of volume paired with smaller daily ranges in the above chart’s point to more consolidation.
Looking at the S&P 500 (SPY), Nasdaq 100 (QQQ), Dow Jones (DIA), and the Russell 2000 (IWM), each is sitting within their prior days’ range.
If the market makes a small break from the highs, we can look at the last couple of day’s lows as minor support levels to bounce from. These support levels are also shown as black lines on the above charts. Using these lows as reference areas we can watch them as potential buy entries if the market begins to bounce.
Additionally, using bonds as a risk on or off indicator—High Yield Corporate Bonds ETF (JNK) has pulled back towards its 200-Day moving average, while the 20+ Year Treasury bonds TLT is holding above recent price action and over its 50-DMA.
With long-term bonds showing strength and JNK pulling back towards support this further points to market hesitancy.
Nonetheless if a small pullback forms, the media will likely point towards inflation as a key pressure, however, we will be one step ahead knowing that the technical analysis has already given us a partial warning.
Stock Market ETFs Trading Analysis & Summary:
S&P 500 (SPY) 466.92 minor support.
Russell 2000 (IWM) 237-240 support area.
Dow (DIA) 359.87-361.89 support area.
Nasdaq (QQQ) 393.92 minor support.
KRE (Regional Banks) 72.90 support area.
SMH (Semiconductors) 294 minor support.
IYT (Transportation) 273.76 support the 10-DMA.
IBB (Biotechnology) Inside day.
XRT (Retail) 100 minor support.
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.