10/21/2022 |
Market Update Into October 24th: The Bulls Claw Back
Another wild week in the markets comes to a close, and as if out of nowhere, things are looking much better than most could have ever expected when the week began. The fib levels we mentioned in last week’s update all held and prices were able to bounce nicely. It’s always darkest before dawn, as they say, and with this week came news that was darker than we’ve seen in some time. Inflation, interest rates, mortgage rates… It’s all bad news out there. It’s fitting, then, that the market rallied. When a trade gets crowded, price is almost always going to go in the opposite direction, and the downside trade was the most crowded it’s been in a very long time. Let’s dig into the individual names.
Weekly Analysis
This week, the SPY ETF closed at $374.29 (+4.66%), bouncing off the 50% Fibonacci retrace from the Covid low. Though it was a strong week, this index is not nearly out of the woods yet. Above lies the aVWAP from the recent high, and we’ll be keeping our eye out for some resistance in that area. The weekly RSI divergence does suggest strength brewing under the surface.
This week, the QQQ ETF closed at $275.42 (+5.63%). Similar to SPY, this index bounced off the .618 Fibonacci retrace we mentioned last week, and above lies the aVWAP from the swing high. With a low-volume node just below it, this will be an important area to watch for resistance next week.
This week, the IWM ETF closed at $172.70 (+3.53%), and exactly the same as the SPY and QQQ, this index bounced off the 50% Fibonacci retrace mentioned in last week’s update. This index also has a similar area to watch for resistance next week; The aVWAP from the swing high, which aligns with a low-volume node.
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