The first trading week of the new year is in the books and, with the Nonfarm Payroll number announced on Friday, indices finally got a break out of the ranges they’ve been stuck in for the past few weeks! There are some big catalysts that could impact markets next week, including another CPI reading on Thursday, premarket, and the kickoff to earnings season on Friday, premarket, with all of the big banks reporting. How these events will impact the market is yet to be seen, but we will soon find out! Until then, let’s take a look at where we stand now.
This week, the SPY ETF closed at $388.08 (+1.48%), and the multiple Doji and Hammer candles on the weekly time frame could be signaling a reversal. As well, this index managed to regain its aVWAP from the recent lows. The platform is identifying a potential double top scenario on the daily time frame, so how price reacts at the low in between the two tops will be important to watch in the sessions to come. This will help us understand if the recent price action is a bear flag or a higher low!
This week, the QQQ ETF closed at $268.80 (+0.90%), making it the weakest performer of the group. On the weekly, we can see two concurrent Doji candlesticks, which tend to signal a bottom is trying to be found. However, with RSI still below 50, the double top being identified on the daily, and price still well below the aVWAP from the recent lows, this index still has some catch-up work to do relative to its peers.
This week, the IWM ETF closed at $177.58 (+1.85%), and similar to the SPY, we see a reclaim of the aVWAP from recent lows as well as multiple bottoming candles on the weekly time frame. Whether this name is forming a bear flag or putting in a higher low on the daily time frame is yet to be seen, but RSI climbing back above 50 suggests strength.