Stocks rallied again on Tuesday, with the Russell 2000 (NYSEARCA: IWM) making new all time highs. That said, the broader market sold off a bit into the close.
Let’s review key price levels on the major stock market index ETFs, along with today’s market theme.
Russell 2000 (NYSEARCA: IWM) 169.76 is now the big support to hold.
S&P 500 (NYSEARCA: SPY) 285 was resistance, now support. And a good pivotal number to use if the market sells off.
Nasdaq (NASDAQ: QQQ) 182.65 the resistance. 177.50 the 50 DMA support to hold.
Dow Jones Industrials (NYSEARCA: DIA) 256.75 now pivotal support with same sentiment as SPY.
The lifespan of the largest brain corals is 900 years.
Feels like the lifespan of this bull market, no?
Last night we wrote, “While we would like to see IWM (Russell’s) clear the ATHs, that pattern of lower highs will negate once this clears 169.76.”
And so, Granddad did his thing. the Russell 2000 (IWM) cleared that level and then some, continuing up to new all-time highs at 171.36.
This juiced just about everyone in the Family.
Granny Retail XRT made new highs.
Prodigal Son Regional Banks, although not at new highs, did a fine job getting lavish.
Sister Semiconductors gets a pass at needing to see new highs.
SMH just needs to hold that 50-week moving average level at around 102.85.
Big Brother Biotech, nowhere near the highs, at least cleared the fast-moving average.
Transportation IYT, made a new all-time high, but closed beneath 206.90 and the older ATH at 206.73.
However, they may also be vulnerable to storm damage.
That begs the question, given the age of this brain coral-like rally, will it die of old age or from an upcoming storm?
Once the news about Michael Cohen’s plea deal hit the tape, profit taking began.
“Cohen is expected to plead guilty to charges related to bank fraud, tax fraud and a campaign finance violation, according to two people with knowledge of the situation.” – Washington Post
Nevertheless, it is yet unclear whether this will impact Trump, and if so, by how much.
This is precisely why news can be a storm that creates real damage to brain coral, or it could be just a temporary jolt to its skeletal formation.
Last night, the market stood a couple of rungs above the alligator’s mouth.
Today, it climbed a bit further up the ladder.
Everyone seems to be well aware of the ongoing dangers the market continually shrugs off.
With all the Family members strong, we like to turn to our Transportation sector.
As this week continues, watch for IYT to continue above 206.90, or tell us it put in a very neat double top.
How will we know?
A move under 205.25 would sting. A move under 202.85 would diminish their food supply. A move under 200 would most likely prevent further market symbiosis.
Ironically, brain coral is brainless.
Therefore, never trade like one.
The authors may have 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.