Will The Nasdaq 100 Hold Key Support?

This week has been a wild ride from new highs followed by a quick pullback towards support in certain indices. High Yield Corporate Debt ETF (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 (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 (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 (IWM), Dow Jones (DIA), and the S&P 500 (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 (IYT) and Regional Banking (KRE) sectors 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.

Disclaimer: The information provided by us is for educational and informational purposes. This information is based on our trading experience and beliefs. The information on this website is not ...

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