August 18, 2019
In last week’s Market Outlook, I posed the question, “Did stocks just put in a significant bottom?” Last week’s market action put that thought to the test. The IWM and DIA made new swing lows, but the SPY and QQQ didn’t even come close. And the leading sector, semiconductors, (SMH) didn’t flinch. As a result, the question remains unanswered. Additionally, the condition of the marketRead More.....
Based on the close of August 22, 2019:
S&P 500 (SPY) Support Friday’s high, 289.33 Resistance at 50-DMA and swing high area, 294.
Russell 2000 (IWM) Support around 149 area. Resistance at 200 DMA, 151 then 152.70.
Dow (DIA) I’d just focus on range low, 254 and range high 264.60.
Nasdaq (QQQ) Support area at 186, then 184. Needs to break the swing high, 189.70.
Chart Last Updated: August 22 2019
Chart Last Updated: August 22 2019
Category: Risk On/Off
How to Use the Equity Indexes Layout:
The image above displays price charts of the four major U.S. equity indexes in along with their MarketGauge Real Motion indicators.
The SPY is the ETF of the S&P 500 index which is the most widely followed and respected gauge of the U.S. stock market by professional traders.
The DIA is the ETF of the Dow Jones Industrial Average index which tracks 30 of the largest and most significant companies traded on the New York Stock Exchange.
The QQQ is the ETF of the NASDAQ 100 index which tends to have a higher concentration of technology stocks and excludes financial companies. The IWM is the ETF of the Russell 2000 index which tracks smaller capitalization U.S. stocks and tends to be the most volatile of the four indexes.
Each price chart has three moving averages. The 10-day moving average is magenta, the 50-day moving average is blue, and the 200-day moving average is green.
For a complete review of how to use basic price chart with moving averages please click here:
How to Use the Real Motion Indicator:
The Real Motion Indicator is a calculation of momentum that is unique and proprietary to MarketGauge. The indicator represents the current period's momentum value with a red dot, the 50-period moving average of that momentum with the blue line, and the 200-period moving average with a green line. The horizontal black line is referred to as the 'baseline' and is plotted at the zero value to delineate positive vs. negative momentum.
Real Motion can be used to analyze and identify a number of different patterns and conditions that help us measure the strength of the trend or key turning points, however, it can also be a very powerful indicator even when used at a basic level. The simple use and interpretation of Real Motion is to read it in the same way you would read and look for trend strength on a price chart. When the Real Motion 1-period (red dot), 50-period and 200-period averages have the same pattern of stack and slope as the stock's respective price chart averages, then the momentum is in agreement with the price chart.
For example, when a stock price is over the 50-period moving average which is also over the 200-period moving average, Real Motion would 'confirm' this trend as having good momentum if its 1-period value is over its 50-period average which is also over its 200-period average (both are positively stacked and sloped).
One powerful pattern to watch for is the condition where the Real Motion indicators are stronger (or weaker) than the price chart vis-a-via their respective measures. Momentum, as measured by Real Motion will often lead price action and can help identify good trades earlier than other indicators. For more advanced patterns and uses of the indicator, please see the real motion indicator product section.