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11/17/2023 |

Market Update Into November 20th: Cup And Handle Breakouts!

It was another huge week in the markets, facilitated specifically by the CPI print, which came in lower than expected. Bulls rejoiced, sending all three major indices quite higher. Tech continued its leadership role, pushing further up and out of the long-term cup and handle pattern. SPY followed suit, breaking out of the handle it’s been stuck in since July, and small caps managed to regain several important levels that were lost in weeks prior. We are now three weeks into this impressive move, and though it’s hard to believe, the charts are suggesting things could just be getting going. Let’s dig into the individual names and see where we ended the week.

Weekly Analysis

This week, the SPY ETF closed at $450.77 (+2.31%), with a powerful breakout from the handle of the long-term cup and handle pattern and a close right into the weekly Order Block area. It’s worth noting the sheer amount of volume in the upper portion of this week’s raindrop candle, a clear visualization of buyers at the top of the range. This is certainly a bullish look, with the MACD indicator on the brink of a bullish cross and short volume on the decline.

this is a weekly chart of the SPY index.

This week, the QQQ ETF closed at $386.06 (+2.02%), and it is now within spitting distance of the all-time high. Much like the SPY, we see a concentration of volume in the upper portion of the raindrop candle which paused right inside the bottom of the long-term Order Block area. Short volume has mostly flatlined, and who can blame them? With a bullish MACD cross setting up, this index looks poised to test its 2021 high sooner rather than later.

This is a weekly chart of the QQQ index.

This week, the IWM ETF closed at $178.33 (+5.43%), making it the largest percentage gainer of the group for the first time in quite a few weeks. It managed to regain the rising trendline from the October 2022 low and the Point Of Control from the all-time high. The concentration of volume above both of those levels seen in the raindrop candle suggests conviction buying and the notable rise in Short Volume increases the chances of a squeeze scenario in the weeks to come.

This is a weekly chart of the IWM index.