Both the tech-heavy NASDAQ 100 Invesco QQQ Trust (NASDAQ:QQQ) and the S&P 500 SPDR® S&P 500 (NYSE:SPY) sit near their recent breakout levels. This is a pivotal place for large-cap companies as the small-cap Russell 2000 iShares Russell 2000 ETF (NYSE:IWM) has already given up almost two weeks' of progress.
Now IWM will look for support from both its 50 and 200-Day moving averages sitting near $222.60. Although it’s no surprise IWM was running into major resistance, the recent 2-day selloff shows how large the divergence between large and small-cap companies really are.
With that said, other symbols we watch as risk indictors could be flipping along with IWM.
Wednesday, the 20+ Year Treasury Bonds ETF via iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) made a huge increase gapping on the market open and clearing over its 50-DMA at $147.06. Now TLT looks to gain a bullish phase if it can hold over its major moving average on Thursday.
On the other hand, risky High Yield Corporate Debt via SPDR® Bloomberg Barclays High Yield Bond ETF (NYSE:JNK) had a small selloff showing that while yesterday's price action was weaker than expected, investors were not running for the exits.
So, what does this mean?
Large-cap and tech stocks steady themselves near highs while small caps retreat into choppy territory losing their upward momentum. Additionally, investors are buying into the safety of long-term bonds but have yet to completely give up on risky investments with JNK.
Looking at other safety plays such as silver (NYSE:SLV) and gold (NYSE:GLD), we can see that each is holding over pivotal moving averages. SLV—the 10-DMA is at $22.16 and GLD is over the 200-DMA at $167.97.
The rest of the week will likely have higher volatility as investors are posed with contradictory information. However, since we are near highs in QQQ and SPY, we have clear levels to from which to watch for either a breakout or breakdown.
ETF Summary
- S&P 500 (SPY) 454.05 pivotal area.
- Russell 2000 (IWM) 222.60 support area.
- Dow (DIA) 10-DMA minor support at 354.78.
- NASDAQ (QQQ) 382.78 resistance area.
- KRE (Regional Banks) Next support area 67.14.
- SMH (Semiconductors) 262.60 main support area.
- IYT (Transportation) 263.82 next support area.
- IBB (Biotechnology) Failed to hold the 200-DMA at 160.30.
- XRT (Retail) 90.86 next support.
- Junk Bonds (JNK) 108.40 support.
- SLV (Silver) 22.16 support.
- USO (US Oil Fund) Broke the 10-DMA at 57.51.
- TLT (iShares 20+ Year Treasuries) Watching for a second close over the 50-DMA at 147.06.
- DBA (Agriculture) 18.93 support.