Key points for the week (US Markets):
· Overall the market extended rally
· Markets slightly consolidated in the middle of the week before extending rally on Thursday to set a new all time high in all – S&P, Nasdaq and Dow Jones
· The rally appears stretched. Though no immediate pullback, a consolidation can be expected
Here we are displaying markets using Index ETFs – SPY, QQQ, DIA and IWM for S&P, NASDAQ100, Dow Jones Industrial and Russell 2000 respectively.
All markets rallied higher. While SPY, QQQ and DIA posted new all time highs, IWM struggled. However the volumes were not very encouraging to sustain this rally on the long term – especially in QQQ.
NOTE - The target zone in SPY at 311 – 312, and 203 – 204 in QQQ, as shown in the images is based on confluences of certain fib numbers and measured move based calculations. Those are hypothesis and NOT statements/forecasts.
A breakdown below the blue lines in the above images (breakdown below most recent swing low pivots) can be taken as a sign of near term correction.
DIA, which had been weaker and had not been able to break above earlier all time high, broke above during this week to close a little higher. IWM, clearly the laggard, is struggling to make such a breakout. Unlike a clearly identified uptrend in the other markets in larger timeframe (weekly), this market is clearly moving sideways.
Clearly the bulls are dominating, though they are showing signs of reducing strength. As the markets are in uncharted territory, we have no clear idea where next supply area could be. The near term pivots (marked in blue lines in the SPY and QQQ charts above) are structural support points. If the markets break down below those price points, we can expect a longer correction.