{"id":5314,"date":"2018-09-21T10:17:46","date_gmt":"2018-09-21T14:17:46","guid":{"rendered":"https:\/\/www.morpheustrading.com\/blog\/?p=5314"},"modified":"2018-09-21T10:17:46","modified_gmt":"2018-09-21T14:17:46","slug":"stocks-support-resistance-sept-2018","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/stocks-support-resistance-sept-2018\/","title":{"rendered":"Technical Analysis: Stock Market Support &#038; Resistance Levels Now"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/stocks-support-resistance-sept-2018\/#Institutional_funds_have_rotated_into_blue_chip_stocks_over_the_past_weeks_enabling_the_Dow_Jones_Industrials_to_outperform_the_other_market_indexes\" >Institutional funds have rotated into blue chip stocks over the past weeks, enabling the Dow Jones Industrials to outperform the other market indexes.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/stocks-support-resistance-sept-2018\/#S_P_500_ETF_SPY\" >S&amp;P 500 ETF ($SPY)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/stocks-support-resistance-sept-2018\/#NASDAQ_100_ETF_QQQ\" >NASDAQ 100 ETF ($QQQ)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/stocks-support-resistance-sept-2018\/#Russell_2000_Small_Cap_ETF_IWM\" >Russell 2000 Small Cap ETF ($IWM)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/stocks-support-resistance-sept-2018\/#Summary\" >Summary<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Institutional_funds_have_rotated_into_blue_chip_stocks_over_the_past_weeks_enabling_the_Dow_Jones_Industrials_to_outperform_the_other_market_indexes\"><\/span><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-5315\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2018\/09\/stock-index-analysis.jpg\" alt=\"major indices technical analysis\" width=\"650\" height=\"371\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2018\/09\/stock-index-analysis-110x63.jpg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2018\/09\/stock-index-analysis-300x171.jpg 300w\" sizes=\"auto, (max-width: 650px) 100vw, 650px\" \/>Institutional funds have rotated into blue chip stocks over the past weeks, enabling the Dow Jones Industrials to outperform the other market indexes.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Are traders and investors suddenly in love with old school, large cap companies like Coca Cola more than the tech darlings?<\/p>\n<p>No, this is merely <a href=\"https:\/\/www.forbes.com\/sites\/robertlaura\/2013\/05\/29\/sector-rotation-explained\/#200ba1c734c2\" target=\"_blank\" rel=\"noopener\">sector rotation<\/a> &#8212; a healthy and normal event that occurs when hedge funds and institutional traders move around massive sums of money.<\/p>\n<p>As such, we expect money to <em>eventually<\/em> flow back into NASDAQ 100 ($QQQ), S&amp;P Midcap 400 ($MDY), and Russell 2000 Small-Caps ($IWM) &#8212; as long as their weekly charts stay in pretty good shape.<\/p>\n<p>CONTINUE READING to find out which indexes could be the next to move higher, based on <strong>key support and resistance levels to watch.<\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"S_P_500_ETF_SPY\"><\/span><strong>S&amp;P 500 ETF ($SPY)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>$SPY was previously lagging behind NASDAQ 100 ($QQQ), but finally broke out to new high about a month ago.<\/p>\n<p>Since then, the benchmark index ETF has been chopping around in a fairly tight consolidation pattern.<\/p>\n<p>This sideways price action is bullish because it enabled the 10-week moving average (MA) to rise and give support at the range lows of the consolidation.<\/p>\n<p>On the weekly chart of $SPY below, notice how the 10-week MA and recent swing low converge to give support around the $286-$287 area:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/~rick\/\/charts\/2016\/180919SPYBLOG.png\" alt=\"SPY weekly \" title=\"\"><\/p>\n<h3><span class=\"ez-toc-section\" id=\"NASDAQ_100_ETF_QQQ\"><\/span><strong>NASDAQ 100 ETF ($QQQ)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>$QQQ has been in chop mode the past three weeks, while holding above key support of its 10-week MA.<\/p>\n<p>As with most preceding pullbacks, the large-cap tech index may take a quick dip below that 10-week MA before $QQQ can move higher:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/~rick\/\/charts\/2016\/180919QQQBLOG.png\" alt=\"QQQ weekly \" title=\"\"><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Russell_2000_Small_Cap_ETF_IWM\"><\/span><strong>Russell 2000 Small Cap ETF ($IWM)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>$IWM is forming a &#8220;base on base&#8221; chart pattern, which is a bullish sign.<\/p>\n<p>A <a href=\"https:\/\/www.morpheustrading.com\/blog\/best-stock-breakouts\/\" target=\"_blank\" rel=\"noopener\">base on base pattern<\/a> occurs when a breakout fails to extend much beyond the highs of the previous base, then chops around for several weeks on top of that proceeding base.<\/p>\n<p>Despite the choppy price action, $IWM still shows major support of both its 10-week MA and downtrend line from the previous high.<\/p>\n<p>Check out key support within the &#8220;base on base&#8221; pattern below:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/~rick\/\/charts\/2016\/180919IWMBLOG.png\" alt=\"IWM weekly \" title=\"\"><\/p>\n<p>One of the most basic tenets of technical analysis is:<\/p>\n<p><em>A prior level of resistance becomes the new level of support, AFTER that resistance is broken.<\/em><\/p>\n<p>That&#8217;s why the previous downtrend line from the June high (pink line) is now acting as key support for $IWM.<\/p>\n<p>S&amp;P Midcap 400 ETF ($MDY)<\/p>\n<p>Similar to $IWM, $MDY is now about four weeks into a base on base pattern.<\/p>\n<p>The 10-week MA is providing support, AND has risen above the highs of the previous base (bullish sign).<\/p>\n<p>Look for $MDY to hold above its 10-week MA (on a closing basis):<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/~rick\/\/charts\/2016\/180919MDYBLOG.png\" alt=\"MDY weekly \" title=\"\"><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Summary\"><\/span><strong>Summary<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Based on the weekly charts above, the main stock market indexes remain overall healthy.<\/p>\n<p>$DIA and $SPY broke out to new highs ahead of the rest of broad market and are consolidating near their new highs.<\/p>\n<p>$QQQ, $MDY, and $IWM have been showing relative weakness, but each index has substantial support below.<\/p>\n<p>Regardless of whether you trade individual stocks or ETFs, you will benefit by marking down the key support and resistance levels shown on the charts above.<\/p>\n<p>This &#8220;big picture&#8221; analysis can help keep you focused on taking advantage of market momentum at the right time and correct direction.<\/p>\n<p>I recommend setting price alerts on these index ETFs to instantly alert you to a breakout to new highs, or a breakdown below key support levels.<\/p>\n<p><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\"><strong>Sign up now<\/strong><\/a> to receive your real-time trade alerts, hot stock picks, and educational market analysis included with your <em>Wagner Daily<\/em> subscription.<\/p>\n<p><em>As always, drop us a comment below to share your thoughts on this article.<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Institutional funds have rotated into blue chip stocks over the past weeks, enabling the Dow Jones Industrials to outperform the other market indexes. Are traders and investors suddenly in love with old school, large cap companies like Coca Cola more than the tech darlings? No, this is merely sector rotation &#8212; a healthy and normal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[5],"tags":[],"class_list":["post-5314","post","type-post","status-publish","format-standard","hentry","category-stock-picks-analysis"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/5314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=5314"}],"version-history":[{"count":0,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/5314\/revisions"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=5314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=5314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=5314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}