After a roller coaster start to a new year with major indices having a choppy Monday morning, each has closed positive showing traders' optimism for the beginning of 2022.
However, the major indices, including the S&P 500 SPDR® S&P 500 (NYSE:SPY), NASDAQ 100 Invesco QQQ Trust (NASDAQ:QQQ), Russell 2000 via iShares Russell 2000 ETF (NYSE:IWM), and the Dow Jones SPDR® Dow Jones Industrial Average ETF Trust (NYSE:DIA) are not out of the water yet and will need to break through key resistance or hold main support to continue upward.
The above charts show resistance or support levels each index needs to clear and hold over.
- SPY— $470-473 Support
- QQQ—$408.71 Resistance
- DIA—$365.64 Resistance
- IWM—$226.73 – Resistance from the 50-Day moving average
With that said, what matters more is not only that these levels are cleared, but going into the new year we see an upward trend from these areas.
The biggest problem we can run into in 2022 is sideways and rangebound trading.
For example, IWM has already been rangebound through 2021, however, if the NASDAQ or SPY fall into the same price action, this could mean trouble ahead. Therefore, watch for these resistance levels to not only clear but to consolidate over before pushing higher.
When it comes to trends to trade throughout the new year, Mish has released an in-depth outlook showing all the key themes and stocks we have big expectations for in 2022. Make sure to grab the outlook via the link 2022 Trends, Themes, and Trades to Watch
ETF Summary
- S&P 500 (SPY) 470-473 support.
- Russell 2000 (IWM) Able to clear over 224 resistance. Needs to clear the 50-DMA next.
- Dow (DIA) Confirmed bullish phase with second close over the 50-DMA at 356.43.
- NASDAQ (QQQ) 404.58 to 408.71 resistance.
- KRE (Regional Banks) Watch for second close over the 50-DMA at 71.89.
- SMH (Semiconductors) 318.82 to clear.
- IYT (Transportation) Showing consolidation over 274.
- IBB (Biotechnology) Needs to clear 155.
- XRT (Retail) Lots of overhead resistance at 94 area.
- Junk Bonds (JNK) Doji day. Held over the 10-DMA at 108.48.
- SLV (Silver) 21.67 to clear.
- USO (US Oil Fund) Held 50-DMA as support at 53.90.
- TLT (iShares 20+ Year Treasuries) Watching for second close under 200-DMA at 144.81.
- DBA (Agriculture) Sitting on the 50-DMA at 19.66.