Should stock market indices rise on Monday?
As the chart above shows, two of the major indices, including the S&P 500 (SPY) and the Dow Jones Industrials (DIA), have erased the previous resistance from their 50-day moving averages (DMA).
On the flip side, the Russell 2000 (IWM) has resistance near $ 230 and the Nasdaq 100 (QQQ) has air resistance of its 50-DMA at $ 369.39.
That said, recent market action has been bolstered by strong banking profits and consumer demand.
Improving consumer demand can also be reflected in the Transportation Sector ETF (IYT) which has widened a second gap since breaking through the 50-DMA at $ 251.72.
Therefore, if the market is going to continue to rise, keep an eye on IYT for upward momentum and for SPY and DIA to maintain their 50-DMA.
When it comes to trading on Mondays, break days are often accompanied by a digestion day as buyers take profits and the money turns into new buyers.
This rotation is normal and so the upward market trends will show an underlying strength.
Nonetheless, the main takeaway for trading on Monday is to watch IYT, SPY and DIA to maintain their current price zones.
If they do, it will help the tech-heavy Nasdaq 100 (QQQ) and Russell 2000 (IWM) seek to erase their core areas of resistance.
$ 230 resistance for IWM and $ 369.39 resistance for QQQ.
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Summary of ETF Trading Analysis:
S&P 500 (SPY) 442 new supports.
Russell 2000 (IWM) Must stay above 225.
Dow (DIA) 350 new assistance zone.
Nasdaq (QQQ) 370 resistance to clear.
KRE (Regional banks) 71.75 resistance zone.
SMH (Semiconductors) 264.25 resistance of 50-DMA.
IYT (Transport) 257 new assistance zone.
IBB (Biotechnology) 160 resistance. 153.38 supported.
XRT (Retail) 93.80 resistance of 50-DMA.
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