March 30, 2020
By Mish Schneider
After inside days in three of the four indices, Monday traded in an even tighter range.
This made for some choppy trading conditions in the indices and many stocks.
Again, we have a good technical setup as the DIA, and the Russell 2000 had inside days from Friday’s trading range.
Plus, the S&P 500 and NASDAQ could not take out last Thursday’s highs.
Referring to our outliers first-
LQD or High Yield Investment Grade Bonds stayed green all day and now, closer to resistance, must hold 123.60.
Junk Bonds JNK had an inside day giving us a clearer range to watch between 95.98 and 92.00
Oil USO broke last week’s low but held 4.00. The overall sentiment remains weak.
Regional Banks KRE tied to oil, held support at the 10-DMA, and closed only marginally red.
For Tuesday, we want to see the outliers hold support.
And, we want to see the indices clear last Thursday’s highs (see ETF commentary).
Otherwise, the recent upward momentum after the unprecedented government and Fed stimulus, could be running out of steam.
Russell 2000 (IWM) Range to watch-110.80-117.60
Dow (DIA) 2 Inside days range 214.01-225.87
Nasdaq (QQQ) Range to watch-183.61-192.72
KRE (Regional Banks) range to watch 31.65-34.73
SMH (Semiconductors) 120 resistance with 115 support
IYT (Transportation) 144 resistance and 132.50 support
IBB (Biotechnology) 110 resistance and 105 support
XRT (Retail) 29.35 has to hold and 31.65 resistance to clear
Volatility Index (VXX) A move closer to 43 would be a low risk buy