Last week, we warned of the possibility of a near-term bounce followed by a continuation lower. We got just that this week, as the markets slid after the uber-hawkish comments out of the Federal Reserve. On Monday, we saw the bounce and there was an attempt to hold it on Tuesday, but with Jerome Powell’s comments on Wednesday, the levee broke and prices took a nose dive. Now, the June lows are squarely in view as the last line of defense before another proper leg lower. Let’s look at the individual names, but first, a word from Jake!
This week, the SPY ETF closed at $367.93 (-4.57%), barely managing to hold the June lows. With a weekly close below the aVWAP from the covid low, it’s becoming more and more likely that this index will see new lows in the coming weeks. However, another small bounce could come in the near term.
This week, the QQQ ETF closed at $275.51 (-4.77%). Much like SPY, this index was barely able to hold the June low. In the near term, it does seem possible that a small bounce could occur, but if the June lows are lost, all eyes will be on the level around the pre-covid high.
This week, the IWM ETF closed at $167.31 (-6.53%), making it the weakest performer of the bunch, percentage-wise. The same story is true here as above. The June low is holding for now, but if it fails, the green zone on the weekly chart will be on-watch for potential support.
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