09/09/2018 | by Brad Ritter

Market Update Into 9/10: Broad Market Update

BlogPrepare for the Trading WeekMarket Update Into 9/10: Broad Market Update

A prepared trader is a profitable trader, and Sunday is a great day to get ready for the week ahead. In this weekend’s issue, we are taking a look back at last week’s blog post as well as a few other main ETFs that track the market. As the market has been so volatile, anything can happen but technical analysis can give traders a general idea of where prices may be heading. To see what we were watching for last week, take a look at last weekend’s blog post here.

Ticker #1: $SPY

Short-term technical setup: 30-minute candle

$SPY 30-minute chart.

  • A huge symmetrical wedge is formed on the 30-minute candle on Friday. If this area breaks down, the gap below could fill next week.
  • This does have some characteristics of a large bull flag as well so it will be very important to see which way the price breaks out of this wedge.

Long-term technical setup: weekly candle

$SPY weekly chart.

  • The weekly candle setup is showing the price trading right in the middle of the current channel with the weekly SMA (20) as support below.
  • If the markets decide to take off next week and continue into the elections, the top of the channel is around $302.

Ticker #2: $QQQ

Short-term technical setup: 30-minute candle

$QQQ 30-minute chart.

  • The $QQQ looks very similar to $SPY on the 30-minute candle with a symmetrical wedge setup into Monday.
  • If this continues down, watch for a test of the wedge support below. If this area breaks, a new downturn could be starting.

Long-term technical setup: weekly candle

$QQQ weekly chart.

  • The weekly candle is showing a very strong bearish candle close on Friday with more room to move down towards the SMA (20) below.
  • If the SMA support breaks, watch for a potential move to test the channel support below.

Ticker #3: $XBI

Short-term technical setup: 30-minute candle

$XBI 30-minute chart.

  • Biotech is in somewhat of a symmetrical wedge as well but a little different than $SPY and $QQQ.  This was created by the massive drop in price last week to the $95.50 zone with a hard bounce back afterward.
  • The price is currently trading right below the SMA (20) and will find resistance at this area as it did previously before getting rejected. If the price continues to break down, watch for a test of wedge support below.

Long-term technical setup: weekly candle

$XBI weekly chart.

  • The weekly candle is showing a very strong symmetrical wedge setting up here with price-finding support right on the SMA (20) below.
  • If the SMA support area fails to hold, watch for a potentially quick move back down to test the ascending wedge support below.
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