U.S. Equities Update: The Market’s Four Directions

Stocks were mixed once again today as traders favored tech and retail stocks, while selling the Transports.

Let’s review key price levels on the major stock market index ETFs, along with today’s market theme.

S&P 500 (NYSEARCA: SPY) – 285 was resistance, now support. And a good pivotal number to use if the market sells off.

Russell 2000 (NYSEARCA: IWM) -169.76 is the big support to hold.

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Dow Jones Industrials (NYSEARCA: DIA) – 256.75 failed with 255.00 next big support to hold.

Nasdaq (NASDAQ: QQQ) – 182.65 resistance has become more palpable. 177.50 the 50 DMA support to hold.

Apache Crown Dancers (see photo) wearing black masks, represent the four directions. North, South, East and West.

So far this week, Transportation (NYSEARCA: IYT) posted a topping pattern based on a new high followed by a high-volume break of the prior day’s lows.

At the same time, Semiconductors (NYSEARCA: SMH) tested the key weekly moving average, held it and rallied.

The rotation from Transportation into Semi’s is enough to keep the bears counting on a southerly direction at bay.

Retail (NYSEARCA: XRT) continues to shine.

After lots of strong earnings in that sector, XRT cleared the price level that prevents it from looking like a top. In other words, the topping pattern did not confirm.

With Tran weak, Tech, Retail strong and the Russell 2000 flat near the all-time highs, does the market have all four directions represented?

Transportation under pressure (or heading south) gives me pause.

Unless IYT holds 202 and rallies back, regardless of what tech does, we are keeping it light.

However, Retail (XRT) heading north, indicates that the bulls are in control.

Semiconductors are not necessarily pointing north at this point.

SMH looks more westernly (consolidating with the possibility its sun will set) until it improves in phase from warning to bullish.

The Russell’s look eastward (consolidating while waiting for the sun to rise). Or maybe more like southeast. I suppose that should IYT go back up, this will as well.

Now, if an Apache Crown dancer shows up wearing a white mask, that represents yet another direction-the one up above.

He is an unpredictable clown who acts as a messenger.

And that’s the point.

We can see the four directions. But it’s the clown who will send us a clear message of which way the market goes from here.

Note that you can get daily trading ideas and market insights over on Market Gauge.  Thanks for reading.

Twitter:  @marketminute

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.