The Markets
The markets are mixed today. DIA and IWM are positive, while SPY (which was green for much of the day) and QQQ are in the red.
Rotation is creeping in.
To fill in the blanks, here are some thoughts from June 15 on small caps, rotation, and the overall market.
And the accompanying chart — weekly timeframe as of June 16, 2024.
So far, the bullish case still holds.
IWM is above the 10-week (50-day) MA and hit the 21-day MA today.
Weekly RSI held the 50% level and is rising.
It is above the critical $200 level, attempting to flip resistance into support — polarity.
And, as stated above, rotation seems to be taking place as buyers step out of QQQ, tech, and semiconductors and into the small-cap space and others.
An updated view of the IWM daily chart shows price continuing to get tighter. The general opinion holds that a move out of such a long, tight consolidation pattern would be sharp and forceful. That potential is worth watching.
However, given IWM’s history of failed moves and false starts, many are likely to be skeptical—understandably so.
The Charts
SPY spent much of the day above its 8-day MA before sinking to close on the lows of the session. A pivot near $536 and the 21-day MA rising up to that level would be a likely support zone on further selling.
QQQ was down the most of the four major indexes today as tech and semiconductor stocks continue to get sold. A gap fill and test of the 21-day MA near $468 should be expected.
IWM was on the upper side of its 21 and 50-day MAs for much of today’s session before coming down some to close just over the 8-day MA. A close above $202.46 — the 21dma — would’ve been best. However, any close over $200 is a positive event.
Note: the year-to-date anchored VWAP is $200.01.
DIA continues to show relative strength after the previously noted potential for a bearish rising wedge did not produce heavy selling. The Dow Industrials are now trading above all the key moving averages and over a recent pivot level — ~$391. A test of highs near $399 and then $401 could be coming.
TLT is continuing the recent trend change well and is now in a bullish consolidation pattern above all the key MAs. Watch for a move to the $96.40 area in the days ahead.
DXY US Dollar Futures continue meandering slightly higher without straying far from the averages.
BTCUSD Bitcoin is getting hit the hardest today, down 6.5% and testing the year-to-date AVWAP. Below that is a pivot and the 200-day MA, $58.2k and $57.5k. That should be significant support. Time will tell.
The Trade
Pick your spots.
As the leaders take a break and rotation steps in, be sure to know the areas that represent attractive buy points. As we head deeper into the typically slower summer season, remaining patient and only adding on or buying dips rather than breakouts could be especially rewarding.
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The Disclosures
***This is NOT financial advice. This is NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.
Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”), an SEC-registered broker/dealer and member of FINRA/SIPC. All trades placed by Mr. Moss are done through T3TG.
Statements in this article represent that person’s opinions only and do not necessarily reflect those of T3TG or any other person associated with T3TG.
Mr. Moss may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual, or it may reflect some other consideration. Readers of this article should consider this when evaluating the information provided or the opinions being expressed.
All investments are subject to the risk of loss, which you should consider in making any investment decisions. Readers of this article should consult with their financial advisors, attorneys, accountants, or other qualified investors before making any investment decision.
POSITION DISCLOSURE
June 24, 2024, 4:00 PM
Long: IBIT, NVDA0705C125
Short: n/a
Options symbols are denoted as follows:
Ticker, Date, Call/Put, Strike Price
Example: VXX1218C30 = VXX 12/18 Call with a $30 strike