Tuesday July 18, 2023
Hey, check out what happened in the stock market today! The S&P 500 Tracking ETF, a.k.a. the SPY, managed to climb up 0.35%. Right now, we’re in this intense resistance zone between 451 and 453. Breaking through this resistance would be important, especially when we look at the weekly chart. It could mean we have a shot at reaching the previous all-time high. I’m not guaranteeing it, but that’s what the price action could be telling us. So, no doubt, this resistance level is a critical one. Now, if we happen to get rejected from this resistance (even if we make it to 453), chances are we might drop down and fill the gap around 443. Keep an eye on that gap, but don’t automatically assume it has to fill. Wait for the price action to give us the rejection signal and then adjust your risk management based on where we were rejected from. Trust me, waiting for the price action to show a pivot is a lot easier than trying to predict the top.
Moving on to the NASDAQ 100 QQQ, it had a solid day with a 0.93% gain. Guess what? We closed outside the upper Bollinger band for the third day straight. Now, we need to pay attention to some resistance levels at 383 and 386. If we keep pushing past those resistance points, we’re likely headed towards 393. And hey, if we surpass that, we’re getting pretty close to the previous all-time highs. Just like SPY, these levels are crucial. By the way, the triple Q’s still have two gaps to fill on the downside. So, if we start to pull back from this overextended condition and break below the low, we could fill the gaps at 374 and just below 369. But remember, even though those gaps will eventually get filled, it doesn’t mean we can’t climb higher first and fill them at a later date. So, don’t jump to the conclusion that we’re going straight down to fill those gaps. Keep an eye on the critical resistance to the upside, and let’s not forget about the critical support we need to maintain above to keep this bull trend going, which sits around 365.
Now, let’s talk about the Dow Jones, which enjoyed a modest 0.2% increase today. The Dow Jones only has one more critical resistance to tackle, and that’s at 346. If we manage to break above that resistance, the sky’s the limit on our way back to the previous all-time high. This resistance is a big deal because we can’t just assume it’s going to crumble. We need the price action to show us through rejection that it’s ready to break. By the way, there are gaps waiting for us below at 343 and 339, but fear not, we have some crucial support sitting at the 20 daily moving average at 341.
Shifting gears to the Russell 2000 IWM ETF, it rocked a 1.07% increase today. The bullish candle completely engulfed Friday’s red candle, which is a promising sign for a more bullish outlook. We have upside targets at 195 and 198, and then we’re cruising into the 200’s territory. Oh, and don’t forget about that gap we need to fill down at 190, with critical support right at the breakout level of 188. As long as we stay above 188, this baby’s still in a bull trend, which means we’re likely headed into the 200’s. Exciting stuff!
The VIX, climbed 1.28%. Right now, the VIX is hanging out in the low 13’s, indicating a low-fear environment. This is usually when folks start hedging their bets. So, we might see fear and volatility spike again from here. But don’t start going bearish unless the VIX starts closing above 15. That’s when we might see the VIX push towards 18 to 20.
Hey, have you been keeping an eye on Bitcoin? It’s still stuck in that bull flag between support at 29,500 and resistance at 31,000. On top of that, it’s trading below a negatively sloping 20-day moving average. If we lose support at the bottom of the bull flag, brace yourself for a speedy trip back down to 28,000. On the other hand, if the bulls manage to break out, we could be looking at a push towards the price target of 35,000. Exciting times for Bitcoin enthusiasts!
Finally, let’s talk Apple. Today, it scored a nice 1.73% gain and we’re inching closer to the previous all-time high at 194. If we break through that level, we could be heading towards the price target of 197.5. Just a heads up, there’s a gap waiting to be filled on the downside at 191. So, if we face rejection, there’s a chance we could drop down and fill that gap. As long as we’re above 190, we can keep that bullish sentiment alive.
Okay, let’s circle back to the S&P 500. We’re currently facing some intense resistance. If we manage to break through, it instantly becomes more bullish, and SPY might just aim for that previous all-time high. However, because we’re dealing with critical resistance, there’s a good chance we’ll see some rejection. So, hold your horses and wait for the price action to confirm it. If we do get rejected, we’ll see the pivot in the price action, giving us a clear risk level to manage as we try to trade down towards filling that gap. If you decide to blindly short or go against the trend, you’ll probably end up getting squeezed out when we break through the resistance. So, let’s try not to fight the trend unless the price gives us the green light.
Cheers,
G. Allan Collins
