It is 1/14/2024!!
Let’s look at the indices.
DOW: We got to ATH this past week. Last week’s low was 372.47, and there is a gap to be filled at 370.61
For the index scalping range for this week: below 374.21 we can get to 372.47 and then 370.61
The 50% fib extension is at 380.21. If we get 378.21 then we have another 2 points higher. But DIA has been very choppy.
SPY: It has an RSI bearish divergence on the weekly and daily charts. But the Bollinger band is expanding upwards on the daily chart. If SPY chooses to go higher because of the strength in Mega tech strength then we can get to ATH this week. However, the price reaching ATH will not be able to negate the bearish divergence. Hence I am very cautious in the longs I take.
Scalping ranges: > 477.43, target 1 478.6 and then ATH at 479.36
For bearish moves, it needs to break 472.
QQQ: Q’s also have an RSI bearish divergence similar to SPY. Q’s got to ATH in Dec 2023. We gapped down for the first week of Jan, and reversed the move this last week. So even though Q’s are overbought, there is no indication of reversal.
On the daily Q’s have a 2-bar reversal for now. It needs to get below 408 for some pullback. The target then would be 406.16 then 403.42
Above 41..27, we retest the ATH made in Dec 2023.
IWM: IWM has been the weakest index. It came out of the long base and broke out. Now pulled back to the 8-week MA. Even though I have written out the ranges for scalping the other indices above, I think IWM will give a better risk-reward for scalping.
Keeping it simple: < 191.23 target is 1858 and then 185.83 And > 195.88 we get 197 as the first target.
Sector ETFs overview:
After the first week of Jan’s trading, the following sector ETFs broke below the 8-week MA: XLK, SMH, XHB, XLY, and IGV
But this past week with MSFT and NVDA breaking out XLK, SMH, and IGV negated the bearish setup on the XLK, IGV, and SMH sectors.
XHB with HD rising and XLY with AMZN rising also negated the bearish setups in the sector ETFs.
It seems that MSFT wants a 400 price level. And till MSFT gets to the 400 level, we going higher. And with MSFT’s weight in the indices and the above-mentioned sector ETFs, we are looking at them going higher.
XLV: JPM healthcare happened last week. Many companies pre-announced earnings and they beat their earnings and the market reaction was a gap up in ISRG, DXCM, and others.
The XLV broke out of the downtrend line but has been up for 8-9 consecutive weeks. A small rest or pullback may be possible.
XLC: At the 61.8% fib extension target. But there is strength in GOOGL and META stock’s price action. They too can have a pre-earnings run-up like MSFT and NFLX.
My earnings trade for the week is AA: I plan to 31/33/5 call debit spread for Jan 19th expiration for $0.5 debit.
The plan is set.
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Disclaimer: This is my trading plan on the indices. This is intended to be for educational and informational purposes only. Trading is risky and loss of capital is possible. Do your own diligence. In trading, there are no guarantees. So please be careful risking capital.
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