Last week started with a large rally and ended with the NASDAQ 100 (QQQ) and the S&P 500 (SPY) at all-time highs.
Though the Dow Jones SPDR® Dow Jones Industrial Average ETF Trust (NYSE:DIA) was not far behind, the small-cap index Russell 2000 iShares Russell 2000 ETF (NYSE:IWM) struggled in the middle of its trading range.
The above chart shows how IWM had been stuck within a range for the past 6 months. Unable to break to new highs, IWM has had many weeks of choppy price action. Though we should continue to watch for strength in the major indices, we should also be hesitant if IWM continues to flounder within the middle of its range.
Right now, IWM needs to play catchup, and if that doesn’t happen it could show a disconnect in the market signaling potential choppy price action is head.
Another space we keep our eyes on is the transportation sector, via iShares Transportation Average ETF (NYSE:IYT). With the rise in COVID cases, supply chain disruptions continue to throttle trade across the world. That is where IYT helps us gauge how the movement of goods could affect the market.
With that said, the recent rally brought IYT back over its 10-Day moving average at $255.53 and back into the prior week's trading range. Along with IWM, it will need to hold its recent price area. Over $251.78 for IYT and over $216.91 for IWM.
These price levels should act as minor support levels the coming week. The current price action leads us to believe the market is ready for another push higher, however, stay cautious if IWM and IYT break these key price levels.
ETF Summary
- S&P 500 (SPY) New all-time highs.
- Russell 2000 (IWM) Like this to hold over 216.91.
- Dow (DIA) 351.09 resistance.
- NASDAQ (QQQ) New highs.
- KRE (Regional Banks) Holding downward trend. Needs to break the 10-DMA at 62.52 for 2 consecutive days.
- SMH (Semiconductors) Watch this to clear and hold over 258.60.
- IYT (Transportation) Minor support the 10-DMA at 255.52.
- IBB (Biotechnology) Needs to hold over 165.79.
- XRT (Retail) 94.70 support the 50-DMA.
- Junk Bonds (JNK) 110.10 highs to clear.
- IYR (Real Estate) Needs to hold over 105.22.
- XLP (Consumer Staples) 70.10 support.
- GLD (GoldTrust) Watching to hold 167.60.
- SLV (Silver) 23 support.
- XME (S&P Metals and Mining) Support 41.05.
- USO (US Oil Fund) 48.22 support area.
- TLT (iShares 20+ Year Treasuries) Price needs to hold the 200-DMA at 147.55.
- USD (Dollar) 93.44 resistance. Holding over the 10-DMA at 92.70.
- DBA (Agriculture) 19.20 next resistance area. Support 18.39