Last week’s consolidation continued into the front half of this week but resolved to the downside due to hotter than expected CPI numbers. The indices now find themselves at pivotal ‘must hold’ levels. If these levels fail, another leg down will be likely. Let’s dig into the individual names.
This week, the $SPY ETF closed at $389.82 (-5.04%), almost completely giving back the strong move seen two weeks ago. On the shorter time frame, the 8/21 cross down is a warning shot. The Covid low aVWAP lies just below as a last line of defense. If this area fails, the $370 target below will likely be hit.
This week, the $QQQ ETF closed at $288.71 (-5.71%), making it the weakest of the indices. Much like the $SPY, we see the 8/21 cross down on the daily time frame. If the ‘must hold’ area fails to do so, this index will likely be poised to test the $260 area.
This week, the $IWM ETF closed at $178.61 (-4.52%), finding solid rejection at the Covid low aVWAP. In addition, it appears the short term trend is about to shift with the cross down of the 8/21 EMA. Though this is the most constructive looking of the indices, if the ‘must hold’ area fails, it will likely fill the gap below around $164.