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10/20/2023 |

Market Update Into October 23rd: Bears Regain Control

It was another difficult week for the bulls, with all three major indexes closing at the low of the week on the highest weekly volume since June. The biggest earnings announcements were mixed, with a double miss from TSLA and a double beat from NFLX. On Thursday, jobless claims numbers and Jerome Powell’s comments at the Economic Club of New York managed to put markets in a whipsaw frenzy that continued into the week’s end. Indexes now appear quite vulnerable as we usher in important earnings reports from tech giants MSFT and AMZN next week. Let’s dig into the charts and see where we ended up!

Weekly Analysis

This week, the SPY ETF closed at $421.19 (-2.39%), with a very strong engulfing reversal candle taking out last week’s high and low and closing below the 40-week (200-day) SMA. Just below is the year-to-date aVWAP and the bottom of the descending broadening range.

This is a weekly chart of the SPY index.

This week, the QQQ ETF closed at $354.60 (-2.92%), making it the weakest performer of the group. It got rejected near the top of the falling wedge and made a new low relative to last week’s low. Below lies the bottom of the falling wedge and then quite a bit of air before the 40-week SMA and the year-to-date aVWAP.

This is a weekly chart of the QQQ index.

This week, the IWM ETF closed at $166.44 (-2.25%), making the the strongest performer of the group despite making a new yearly low. If this is a short-term bottom for small caps, the year-to-date aVWAP and the 40-week SMA rest about 8.5% higher.

This is a weekly chart of the IWM index.

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