Market Update Into May 22nd: New Highs Have Arrived

2 mins read

The past five weeks of range trading finally came to an end with pivotal breakouts to new highs in two out of the three major indices. These are important breakouts that suggest a further continuation of the trend higher. That said, will markets retrace first and give late bulls the chance to get in at lower prices or will they continue their push upwards? Let’s look at the individual names below and see what we can determine.

Weekly Analysis

This week, the SPY ETF closed at $418.59 (+1.71%), taking out the past five weeks of highs and breaking above February 2023 high. This index is now trading into the gap that we’ve been highlighting in previous weekly market updates and it could be ready for some retracement. If it continues higher, traders will be keeping a close eye on the high from August 2022. If it reverses lower, the bottom of the ascending channel and the aVWAP from the March lows will be levels to watch.

This is an image of the SPY index on the daily and weekly time frames.

This week, the QQQ ETF closed at $336.51 (+3.53%), making a strong push higher and taking out the highs from August of 2022. This is an important level to gain for the bulls, but it could result in some retracement before continuing higher. Levels below to watch include the top of the ascending channel, the aVWAP from the late April low, and the aVWAP from the all-time high. Above, there’s a small unfilled gap on the weekly chart that could get filled in the near term.

This is an image of the daily and weekly charts of the QQQ index.

This week, the IWM ETF closed at $176.11 (+1.96%), consolidating at the bottom of the ascending channel on the daily time frame and the Point of Control from the all-time high before pushing higher and rejecting at the aVWAP from February 2023 high. If this index is to continue higher, traders might look to the 50% Fibonacci retracement pictured on the daily chart as the next level for price to potentially find sellers. If the recent weekly lows hold, swing traders might be looking for a move back to the top of the symmetrical triangle pictured on the weekly chart.