Will The NASDAQ 100 Hold Key Support?
Michele Schneider | Jan 09, 2022 03:30AM ET
This week has been a wild ride, from new highs followed by a quick pullback towards support in certain indices. The High Yield Corporate Debt ETF (SPDR® Bloomberg Barclays High Yield Bond ETF (NYSE:JNK) which we use as a risk on or off indicator has broken under minor support from $107.33.
To make things even more confusing, the fear/volatility index via iPath® Series B S&P 500® VIX Short-Term Futures™ ETN (NYSE:VXX) closed negative and one cent over its 10-Day moving average at $18.82.
Given these mixed signals, the question remains if the market will hold or break lower Monday morning.
Though only Monday holds the decisive answer, we should continue to watch the major indices' pivotal price levels.
So far, the NASDAQ 100 Invesco QQQ Trust (NASDAQ:QQQ) is the most at risk for breaking the low of its range at $377. This is such an obvious support level that breaking it could easily create a drop towards the QQQs 200-DMA at $363.
However, the other indices, including the Russell 2000 via iShares Russell 2000 ETF (NYSE:IWM), Dow Jones (SPDR® Dow Jones Industrial Average ETF Trust (NYSE:DIA), and the S&P 500 SPDR® S&P 500 (NYSE:SPY) have further room before hitting support and if they hold, could prop up the tech-heavy index.
The chart below shows support levels drawn in black lines. In the case of the DIA, its immediate support area comes from the 50-DMA (blue line) at $358.30.
With that said, looking at Mish’s Economic Modern Family, the Transportation sector via iShares Transportation Average ETF (NYSE:IYT) and Regional Banking via SPDR® S&P Regional Banking ETF (NYSE:KRE) sector remain the leaders through this volatile week.
Even with bank earnings coming, their relative strength compared to the overall market make them important areas to watch for trade ideas come Monday morning.
h2 ETF Summary/h2- S&P 500 (SPY) Like to see this close over the 50-DMA on Monday over 466.34.
- Russell 2000 (IWM) Next main support 208 area.
- Dow (DIA) The 50-DMA is close but it’s not a key support area at 58.30. Like it to hold Friday's low at 361.13.
- NASDAQ (QQQ) 377.37 support.
- KRE (Regional Banks) New highs.
- SMH (Semiconductors) Main support 288.14.
- IYT (Transportation) 281.45 to clear.
- IBB (Biotechnology) Watching to find support.
- XRT (Retail) 83.54 next support level.
- Junk Bonds (JNK) 106.48 next support level.
- SLV (Silver) 21.00 gap to fill.
- USO (US Oil Fund) 58.69 resistance.
- TLT (iShares 20+ Year Treasuries) 141.45 support.
- DBA (Agriculture) 20.00 resistance.
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