On Friday the 11th the QQQs (Nasdaq) and IWM (Russell 2000) both closed under the 50-DMA. They were not followed by their friends the DIA (DowJones) and the SPY (S&P500).
The temporary divergence they were in has quickly been resolved because all four are back over the 50-DMA
Let’s check out what could have helped them increase yesterday.
Hopeful news from Pfizer (NYSE:PFE) was released yesterday about their COVID vaccine, stating that by the end of October they will know if it works, and pending the FDA could be released by the end of this year.
News like this finally woke up IBB (Nasdaq Biotechnology ETF) who has been trending down since the July high of 146.53.
IBB gapped up and increased over 5% falling 84 cents shy of the 50-DMA.
NVDA (Nvidia (NASDAQ:NVDA) Corp) bought Arm Limited to help them propel their R&D capacity thereby helping NVDA build an AI supercomputer.
Gilead (NASDAQ:GILD), a research-based biopharmaceutical bought Immunomedics (NASDAQ:IMMU), giving Gilead access to their cancer treatment drug called Trodelvy.
Anticipation of the Fed meeting this Wednesday and their continued dovish stance is also boosting investor confidence.
A two-day close over QQQs and IWM would get us back into a bullish phase and back on track with the fresh hope of vaccines coming by the end of 2020.
However, should Monday’s gains falter, watch the very important 50-DMA in both to hold.
Last Week Mish also talked about TECK and the coal industry. TECK (Resources Limited) has made over a 15% move in the past two days.
S&P 500 (SPY) 338 Now Support
Russell 2000 (IWM) 150.75 Now Support
Dow (DIA) 280 Pivotal
Nasdaq (QQQ) In an unconfirmed bullish phase 275 pivotal
KRE (Regional Banks) 38 Now Support
SMH (Semiconductors) Has to hold 167.51 the 50-DMA
IYT (Transportation) 200 pivotal and 203 resistance
IBB (Biotechnology) 130 Now Key Support
XRT (Retail) Has to clear 51.20
Volatility Index (VXX) Went south even more than the market did
Junk Bonds (JNK) 104.50 now critical support
LQD (iShs iBoxx High yield Bonds) 135.60 support to hold