DecisionPoint Diamonds scans have failed to produce. In order to get even a few results, we have had to ease the restrictions, particularly on EMA configurations. If we don’t get scan results for “Diamonds in the Rough”, we dive into the Industry Summary on StockCharts.com so we can find pockets of strength. Well… there are none.

As of yesterday, EVERY industry group had declining Price Momentum Oscillators (PMOs). Today, two PMOs managed to rise a hundredth of a point. Technically that is positive momentum, but these groups are still very suspect.

The first is Oil & Equipment Services ($DJUSOI). The price chart is murky at best, but there are a few signs of life. The RSI entered positive territory above net neutral (50) today. As noted in the opening, the PMO has turned up above both the zero line and signal line, which is usually considered very bullish. While price did rebound and closed above the short-term rising trend, it stayed beneath at the 50-day EMA and February lows.

The Crude Oil chart (USO) is far from encouraging. Yes, there was a rally today, but it finished with a bearish filled black candlestick. Indicators are still very negative. Until this chart looks more healthy, I would be careful with this industry group.

The other industry group that saw rising momentum was Gold Mining ($DJUSPM). The Mining ETF ($DJUSMG) is still showing declining momentum.

We’ve been writing in the DP Alert that Gold Miners are beat down and really vulnerable to more decline. Instead of using the industry group chart, we are going to use GDX. We have “under the hood” indicators available to us on that chart.

Currently, GDX is at 52-week lows and, after the recent breakdown below the July low, we’ve warned that this group isn’t likely to rebound anytime soon. The big problem for Gold Miners is the complete lack of participation. You’ll notice 0% for nearly all participation indicators with the exception of one or two stocks with price above their 20-day EMA. Gold had a good day, and that likely spurred GDX on.

The Gold chart is showing improvement with today’s rally, sort of. If Gold can continue to rally, fishing from the Gold Miners would be palatable. However, Gold Miners aren’t merely subject to Gold prices, they are subject to the overall market trend as they are companies, not the metal.

Conclusion: There is nowhere to hide out. Interest rates are skyrocketing so the safety of Bonds is out the window and Gold has not been seen as a safe haven, at least not yet. The safest place is sadly cash or for brave souls, inverse ETFs and shorts.

Good Luck & Good Trading,

Erin Swenlin

Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

(c) Copyright 2022 DecisionPoint.com

Helpful DecisionPoint Links:

DecisionPoint Alert Chart List

DecisionPoint Golden Cross/Silver Cross Index Chart List

DecisionPoint Sector Chart List

DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

On this week’s edition of StockCharts TV‘s The MEM Edge, Mary Ellen reviews where upside resistance is for the S&P 500, as well as why Growth stocks are getting hit the hardest. She also shares select inverse funds to buffer your holdings.

This video was originally broadcast on September 2, 2022. Click on the above image to watch on our dedicated MEM Edge page on StockCharts TV, or click this link to watch on YouTube. You can also watch on our on-demand website, StockChartsTV.com, using this link.

New episodes of The MEM Edge air Fridays at 5pm PT on StockCharts TV. You can view all previously recorded episodes at this link. You can also receive a 4-week free trial of her MEM Edge Report by clicking the image below.

Hello friends,

Labor Day is approaching, and the market is closed in observation, so it’s time for some fantastic fun, entertainment for everyone, and relaxation.

I have been doing two videos a week along with the written commentary to introduce you to the one index and six sectors of the Modern Family. This includes the Granddaddy of the U.S. Economy, the Russell 2000. The family, by design, is U.S.-centric and has been an invaluable resource to tell the story of the economy and the stock market. A link to who the members are and why each is on our website. 

This weekend, we are looking at the weekly charts to gain perspective. We begin with the Russell 2000 and his wife, Grandma Retail XRT. Both represent demand and supply, focusing on overall consumption and small business activity. Note how each railed from their June lows, cleared back over their 200-week moving averages, then ran up very close to their 50-week moving averages. We call this a trading range, and as such has been the strategy we have employed. Currently, buying weakness and selling strength at turning points yields profits.

IWM and XRT have sold off hard since Jackson Hole. They both now approach their 200-WMAs. That makes the story clear. Should they hold, up we go. Should they fail those critical green lines, expect another leg lower.

Only 5% of Americans have adjusted their portfolios in 2022 in their 401(k)s and 403 (b)s. Our biggest concern is, at what point does the pain get too hard to deal with and we see massive liquidation?

Well, we’d rather be prepared and have a plan. Nonetheless, there are pockets of the market and within the family that are doing better than the others. Let’s examine these charts as well.

The following two charts are Transportation (Transports IYT) and Regional Banks (our Prodigal Son KRE). We grouped them because they have sold off, but are holding well above their 200-WMAs, given each relative strength. This tells us that, although weaker, demand from delivery, travel and banking gives us a glimmer of hope that things aren’t as bad as folks think. Plus, it supports our stagflation theory, where the economy is stagnating but not necessarily collapsing. At least, not yet.

The last two members are more speculative in nature. Sister Semiconductors (SMH), although in better shape than Granny and Gramps, on a daily chart basis, needs to hold 200. If that level breaks, then we are looking at that 200-WMA at 186-187. Big brother Biotechnology (IBB) is technically the weakest one of all the family members. Already priced under both the 50 and 200-WMAs, we see 118, or the early 2022 lows, as the first level to hold. If that breaks, 110 could be the next stop of support.

If you put this all together, no doubt this market could be in for more trouble. However, never discount these weekly support levels. Be open minded, keep the noise down in your head, and follow price.

The Family and the stock market is forward-thinking. We never really know what lies ahead. Therefore, keep the Economic Family in your toolbox, and let them and the charts help you navigate your next trades.

To learn more about how to invest in profitable sectors of the Modern Family, reach out via chat, phone, email, or book a call with our Chief Strategy Consultant, Rob Quinn, by clicking here.

Mish’s Upcoming Seminars

ChartCon 2022: October 7-8th, Seattle (FULLY VIRTUAL EVENT). Join me and 16 other elite market experts for live trading rooms, fireside chats, and panel discussions. Learn more here.

The Money Show: Join me and many wonderful speakers at the Money Show in Orlando beginning October 30th running thru November 1st; spend Halloween with us! And this weekend, we have a special discount code to save $$$!

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

In this appearance on BNN Bloomberg, Mish covers what to watch for and some picks using tight risks.

Mish appeared as a guest on the Wednesday, August 31 edition of StockCharts TV’s The Final Bar with David Keller, where she encourages viewers to focus on the 50-day moving average for transports $IYT, retail $XRT and small caps $IWM.

Check out Mish’s latest article for CMC Markets, titled “Patience is a Virtue Amid Market Angst“.

In this appearance on Coindesk with Christine Lee, Mish sits down to discuss the immediate- and longer-term picture for how the technical and fundamentals will impact crypto.

In a guest appearance on Coast to Coast with Neil Cavuto, Mish and Neil talk about the economy, trading ranges and which sectors to watch.

In this appearance with Caroline Hyde on Bloomberg TV, Mish covers rates, the dollar, commodities and key market sectors.

ETF Summary

S&P 500 (SPY): 390 support held, 400 level failed.Russell 2000 (IWM): Needs to clear 184.25 hold 177.Dow (DIA): Closed weak under support. 312 key.Nasdaq (QQQ): Either climbs back over 296 or more pain to 280.KRE (Regional Banks): Unconfirmed bearish phase w/ close under the 50-DMA.SMH (Semiconductors): 215 resistance and 205 support.IYT (Transportation): Unconfirmed bearish phase w/ close under the 50-DMA; if fails more Tuesday, pain. IBB (Biotechnology): 125 resistance, 117 support.XRT (Retail): 64.50 resistance and 62.00 6-month calendar range high support, which held — at least one hopeful sign.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

I find semiconductors to be an important group to watch, given that they essentially provide the “backbone” to our modern information economy. Pretty much every product we use at this point has a chip involved, so if chip makers are doing well, then I can assume the economy is doing just fine.

The failure of stocks like Nvidia Corp. (NVDA) to make a new high in January, while the S&P 500 did so, suggested caution and limited upside, which proved prescient. So what does it mean now that NVDA made a new low for 2022 this week? 

First, let’s review how 2022 has played out for this stock, and use a “measured move” technique to identify potential downside targets.

After NVDA bottomed out in January around $210, the stock spent the next three months fluctuating between 210 as support and 270-290 as resistance. This consolidation period, indicated with purple trend lines, could be called a rectangle pattern and indicates a market in equilibrium. Even though there are short-term price swings, the price was essentially rotating around a midpoint around $240. The market is basically telling you that, at this point in time, NVDA is worth about $240 a share.

In late March, the stock broke out of the pattern to the upside, but this breakout was short-lived. Just as the S&P 500 had a failed breakout above the 4600 level at this time, NVDA ended up stalling out and re-entering the consolidation area. Then in April, the price exited the pattern to the downside, confirming a new down leg in this bearish phase. Now we can use a measured move technique to anticipate a potential downside target.

What is a measured move? While there are a number of variations of this approach in the technical toolkit (even more advanced methodologies like Elliott Wave), I like to keep it simple. Basically, the trend leading into a consolidation pattern is often matched with the trend leading out of the pattern.

Let’s review the chart of NVDA and consider that first breakdown in April 2022.

If you take the initial downthrust from November 2021 to January 2022, then assume a similar trajectory after the breakdown in April, that would suggest a downside objective around $160. NVDA did indeed bounce off this level of support, which led to another consolidation phase between $140 and $190 (indicated with pink trend lines).

So what can does a similar approach tell us about the current situation for this important stock?

The move from the March swing high down to the upper end of the pattern is about a $100 move (290 to 190). We’re using log scale for this demonstration, so a similar percent move (blue arrows) would give a downside target around 90-95.

Now here’s the real question. If NVDA does reach that downside target, that would be about another 30% below current levels. What would the Nasdaq Composite do in that scenario? How about the S&P 500?

While we can run similar analysis on the major averages themselves, I have found that by some of the best tells in the market often come from analyzing specific stocks and groups, then comparing those signals to the broader indexes. In the case of Nvidia, the measured move technique suggests the bear market phase could still have plenty of room to move.

Want to digest this chart in video format? Just head over to my YouTube channel:

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my YouTube channel!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication.   Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

Although the markets ended flat on a weekly note, the past five sessions remained quite volatile. The markets stepped into the week while inheriting a very weak global trade setup; the weakness was inflicted by very bearish reactions of the US markets following Jerome Powell’s comments at the Jackson Hole symposium on Friday. The Fed commented that it has all intentions of continuing with a similar quantum of rate hikes until the macroeconomic figures return to the desired levels. This saw the global markets getting weaker; the Indian markets also suffered a gap down opening at the beginning of the week. However, all our gap-down openings were ultimately bought into, and this kept the markets within the broad range and above their crucial supports. After oscillating in a broad range of 611.45 points, the headline index closed flat with a negligible loss of 19.45 points (-0.11%) on a weekly note.

Regardless of the reasons that we associate with the market reactions, the markets have defined a clear range for themselves from a technical perspective. First, the NIFTY has not been able to move above the falling trend line pattern resistance that begins from the lifetime high point of 18600 and joins the subsequent lower tops. Secondly, the NIFTY has rebounded from the levels very close to the 50-Week MA, which is placed at 17135. This defines a broad trading zone of 17100-17650 levels for the NIFTY. The volatility index, INDIAVIX, spiked, rising by 7.33% to 19.55 on a weekly basis.

The coming week is all set to be within a defined range; the levels of 17650 and 17790 will act as potential resistance points. The supports come in at the 17380 and 17200 levels.

The weekly RSI stands at 57.76; it remains neutral and does not show any divergence against the price. The weekly MACD is bullish and remains above the signal line. No major formations are seen on the candles.

The pattern analysis of the weekly chart shows that the NIFTY has continued to resist the falling trend line pattern resistance. This is a significant pattern resistance as it begins from the lifetime high point of 18600 and joins the subsequent lower tops. On the lower side, the NIFTY has rebounded from the levels very near to the 50-Week MA. The 50-Week MA is presently at 17136; this defines the broad trading range for NIFTY between the 17100-17700 levels.

As per the current technical setup, any sustainable directional move will occur only if the NIFTY moves past 17700 levels or slips below 17100 on a closing basis.

A directional bias would be established only if the NIFTY moves past 17700 or slips below the 17100 level. Unless that happens, we will see the markets oscillating back and forth in this defined range. It is also very much likely that the markets stay highly stock-specific; the key to navigating such markets would be to find those stocks that have a stronger, or at least an improving, relative strength against the broader markets. A highly selective approach is advised for the coming week.

Sector Analysis for the Coming Week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

The analysis of Relative Rotation Graphs (RRG) shows that the Metal Index has rolled inside the improving quadrant. This markets a potential end to the relative underperformance of this group. NIFTY Realty, PSU Banks, BankNifty, MidCap 100 and the Financial Services Indices are firmly placed inside the improving quadrant. The Consumption Index is also inside the leading quadrant, but it is seen giving up on its relative momentum against the broader markets.

While the NIFTY FMCG index has moved ahead in the weakening quadrant, the Auto Index has just rolled over inside the weakening quadrant.

The NIFTY Media, Pharma and the IT Index continue to languish inside the lagging quadrant. The Infrastructure, Energy, Commodities and PSE Indices are also inside the lagging quadrant, but they appear to be improving on their relative momentum against the broader NIFTY500 Index.

NIFTY Services sector index remains inside the improving quadrant.

Important Note: RRG™ charts show the relative strength and momentum for a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

Yes, I’m very familiar with that old Wall Street adage, “Don’t Fight The Fed!” But similar to the “Go Away In May” theory, I’m happy to poke holes in it. Rather than just blindly buy what the media is selling, I do research. There is plenty of history to support the notion of remaining invested while the Fed does its thang.

Remember the secular bear market of the 2000s? The dot-com bubble burst in the very early 2000s and, as we recovered, the Fed went on a rate-hiking rampage. They raised rates at 17 consecutive meetings! The first of those rate hikes was in June 2004. They didn’t hit the brakes until after their 17th hike in June 2006. That was 2 years of rate hike after rate hike. At the time of the first rate hike, the fed funds rate was at 2.00%, a historically-low level.

Want to see how the S&P 500 fared during this two-year period of rate hikes:

It wasn’t exactly an explosion higher in the S&P 500, but there were plenty of investors/traders willing to fight the Fed. And they won.

One other very significant period in history where investors had no problem handling the Fed “mano y mano” was the 1960s. There were plenty of rate hikes and a few recessions, but, in the end, the secular bull market won out. In April 1961, the fed funds rate was near zero and access to money was easy. We were a decade into a secular bull market (this sound familiar?). The Fed went on a rate-raising campaign that took rates to 6% by October 1966. That’s a MASSIVE amount of rate hiking in 5+ years. Yet I’d like for you to look at the S&P 500’s performance using a weekly chart that covers this period:

During that 1962 cyclical bear market, the S&P 500 lost 29% and fell for 6 1/2 months – very comparable to our 2022 cyclical bear market. This year, the S&P 500 lost 25% and dropped for 5 1/2 months.

I believe there’ll be times to fear the Fed, but not when the fed funds rate still sits at 2.25%-2.50%.

Fear the media, not the Fed. The media will state ANYTHING to gain more clicks. The more fearful the headlines, the more clicks they get. Therefore, if we question the media, we should be afraid of HYPER inflation, higher rates, the Fed, the war in Ukraine, the chip shortage, the time of year, politics, weather in the Baltic Sea, lunar eclipses, and ____________ (fill in the blank). Fear sells.

I simply tune out ALL of the noise and follow the charts, including rotation, intermarket relationships, historical trends, and the like. Wall Street builds large positions in their favorite stocks during tumultuous periods like the one we’ve endured in 2022. Don’t believe me?

Here’s how the QQQ (ETF that tracks the NASDAQ 100) has traded since its closing high on November 19, 2022 and through Friday, September 2nd:

I’ve broken the trading down by period/phase of the cyclical bear market and by time of the day. My belief is that we are all manipulated at the opening bell and during the first 30-90 minutes of trading. Price is what it is, but how we get there is important. The clear “bearish” period was 1/4 through 5/20 as every period of the trading day saw distribution. In other words, there was selling at all times of the day. When Wall Street first began exiting stocks during the initial rotation phase, there were still opening gaps higher and early morning strength as retail traders continued to do as they had done for nearly two years – BUY, BUY, BUY! Meanwhile, Wall Street began selling into this buying. This behavior was also confirmed by the MASSIVE rotation into defensive stocks during December 2021. Note the “recovery” phase from 6/18 to 8/15 and how the QQQ traded. There was very little strength at the opening bell and during the first 30 minutes of trading. But the accumulation throughout the balance of the day was rather obvious. I also calculated the performance by sector during this period. Here’s the order, best sector to worst sector:

Consumer discretionary (XLY) and technology (XLK) led the recovery phase, unlike the initial rotation and distribution phases, when Wall Street was jumping ship.

The manipulation in 2022 has been extreme based on my research. In Monday’s EB Digest, I plan to feature a software company that lost 139 bucks (more than 80% of its value) since its November 19, 2021 close, yet, on a net basis, fell just 1 dollar after 11am ET. It was all gap downs and early morning selling. During 5 hours (11am-4pm ET) of the 6 1/2 hour trading day, the stock lost nothing. If you’d like to see the stock and read more about it, CLICK HERE to sign up for our FREE EB Digest. There is no credit card required and you may unsubscribe at any time.

Also, be sure to “subscribe” to my Trading Places blog by providing your email in the area provided below. There’s no cost and, by subscribing, my articles will be sent directly to your email as soon as I publish them.

Happy trading!

Tom

Forget the employment report. There are bigger things to be concerned about.

September is traditionally a bad month for stocks. And with the Fed draining $95 billion in liquidity from the banking system as it accelerates QT, things could go from bad to worse, although bearish sentiment is increasing and the market is getting very oversold.

There are still areas of the market that worth considering, such as select stocks in the natural gas, oil and nuclear energy sectors. But even their risks are rising as the Fed tightens, and the G7 and Russia are now playing a dangerous game with the world’s oil supply.

Still, there was a glimmer of hope at week’s end, as the Eurodollar Index (XED), see below, moved decidedly higher. We’ll have to see what develops from this, as a move higher in XED is often a bullish sign for stocks.

Resource Pain

On 9/2/22, the G7 agreed to place a price cap on Russian oil. Never mind that the odds of success due to the reality of implementation are close to zero.

The Russians answered by threatening to cut off oil from anyone who joined the pact. And then, suddenly, they found a leak in the Nord Stream 1 natural gas pipeline to Europe (which already had a reduced flow by 40% of normal levels) after they had announced that routine repairs were successful and that the “temporary” halt to flows would resume. Stocks immediately gave up a nice bounce and oil prices rolled over.

In other words, a significant portion of the oil supply is now openly a bargaining chip for Russia and the G7 as the war in Ukraine drags on.

Welcome to the Edge of Chaos:

“The edge of chaos is a transition space between order and disorder that is hypothesized to exist within a wide variety of systems. This transition zone is a region of bounded instability that engenders a constant dynamic interplay between order and disorder.” – Complexity Labs

Hot Spots are Getting Hotter

Ukraine is the hottest spot in the world currently. A longer problem is the potential for rising collateral damage as the ripples of the conflict spread. Consider the following:

Megadroughts in Europe, the Southwest U.S. and China have significantly reduced hydroelectric power generation and are showing no signs of reversing.China is shutting down cities again due to COVID outbreaks squeezing the global supply chain.Europe has filled its natural gas stores to its stated goal of 80%, but that’s only enough to cover 30% of winter consumption.U.S. natural gas supplies remain below last year’s pre-winter levels and below the five-year average. The EIA’s estimates indicate that, by the time winter arrives, they will be 12% below average.U.S. Oil supplies remain 6% below last year. Gasoline and diesel (heating oil) are also well off their norms, with diesel supplies checking in at 23% below last year.The oil rig count has stalled while natural gas rigs are flattening out.France, on 9/2/22, announced that it is restarting all of its nuclear reactors. But water is scarce, so reactor cooling may be an issue.

It’s the Grid, they Say. But What About Putin?

Talk about the butterfly’s wings flapping.

California plans to phase out electric cars (EV) by 2030, but recently warned drivers to avoid charging their EVs over Labor Day weekend, as their electric grid is in danger of failing. That doesn’t add up, unless, of course, you factor in that, while much of the world has been erecting wind turbines and building solar farms, most countries, especially the U.S., haven’t upgraded their grids to handle the new power they are creating.

According to reports, the problem isn’t necessarily financial, but political. Recently passed legislation has $2.5 billion earmarked for grid expansion and improvement projects. But, reportedly, rivalries between utility companies, local and state bureaucracies, and the fear that consumers won’t want to pay higher electric bills is keeping the expanding renewable generated resources from actually being connected to the grid efficiently.

Of course, there is also the issue of cloudy days and days with no wind to contend with in regard to renewable power generation. All of which points to batteries and nuclear power as potential solutions. But batteries are not without issues, such as maybe there isn’t enough lithium in the world to power all the storage needs that are being projected. And no one wants a nuclear plant near their house.

On the other hand, there is the very short term to consider – this winter. All of which brings me back to the original question. Why are oil and natural gas prices falling when it’s obvious that there is above-average potential for shortages of both this winter?

Well, as far as I can tell, it’s one of three things:

China’s economy is much worse than anyone is saying and insiders are selling oil and gas before the news hits. This would dampen demand.As Saudi Arabia has recently said, the futures markets are disconnected from reality, as, in the real world, oil supplies are much lower than the futures prices indicate.Putin is betting that Europe is near the economic breaking point and that it’s time to push it over the edge, which would create a major economic disaster and reduce oil demand.

There is one more wildcard on the table: the U.S.-Iran nuclear deal. OilPrice.com reports that Iran has anywhere from 60-70 million barrels of oil floating in offshore tanker reservoirs, which could hit the market in short order if there is an agreement.

The price charts for both crude oil (WTIC) and natural gas (NATGAS) suggest consolidation patterns are unfolding, with crude being a bit more bearish as it’s trading below its 200-day moving average, with the $90 price area being a pretty stout line in the sand. NATGAS looks more bullish, but $10 has been a hard price wall to crash through.

Indeed, the complexity of the world’s energy situation, calls for multiple trading options. You can see my energy picks here.

Bonds Yields Rise. Liquidity Gets a Bump Up.

Bond yields pushed higher last week, with the U.S. Ten Year note yield (TNX) brushing up against the 3.25% level, its highest in nearly three months. Part of it was related to Eurozone inflation clocking in at over 9% on a year-over-year basis. But more important for the longer term, the Fed is now taking out $95 billion from the financial system per month as part of its QT program. That’s bearish for stocks.

Still, the Eurodollar Index (XED) delivered a nice jump higher at the end of the week, which may be a positive.

Bonds have a new trading range for TNX between yields of 3% and 3.25%.

You can get a working overview of how this works in my latest Your Daily Five video here.

No Bounce Evident in Extremely Oversold Stock Market

The stock market is well overdue for a bounce. But oversold markets can stay oversold for a long time.

The New York Stock Exchange Advance Decline line (NYAD) has not recovered from the Powell speech, now making new lows on a regular basis, which means systemic selling and short selling is ongoing. NYAD sliced through its 50-day moving average easily while the RSI hovers near 30. The CBOE Volatility Index (VIX) remained above 25, keeping it in a bearish posture as put option buyers continue to add to positions.

The S&P 500 (SPX) crashed through 4000 and its 50-day moving average, failing on its first attempt to rise above they now key resistance levels. Accumulation Distribution (ADI) has topped out, meaning that short sellers are back. On Balance Volume (OBV) is not showing any positive signs at the moment.

The Nasdaq 100 index (NDX) remained below 13,000 and its 20-day moving average. Accumulation Distribution (ADI) and On Balance Volume (OBV) remain bearish here as well. 12,000 is the next support level.

Which is the best-looking energy stock at the moment? Find out with a FREE trial to my service (click here) and learn more about my risk-averse approach to trading stocks.

To get the latest up-to-date information on options trading, check out Options Trading for Dummies, now in its 4th Edition – Get Your Copy Now! Now also available in Audible audiobook format!

#1 New Release on Options Trading!

Good news! I’ve made my NYAD-Complexity – Chaos chart (featured on my YD5 videos) and a few other favorites public. You can find them here.

Joe Duarte

In The Money Options

Joe Duarte is a former money manager, an active trader and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.

The Everything Investing in Your 20s and 30s Book is available at Amazon and Barnes and Noble. It has also been recommended as a Washington Post Color of Money Book of the Month.

To receive Joe’s exclusive stock, option and ETF recommendations, in your mailbox every week visit https://joeduarteinthemoneyoptions.com/secure/order_email.asp.

In this week’s edition of StockCharts TV’s Sector Spotlight, for the first Tuesday of September, I dive into the monthly chart, which was completed last Thursday. We kick off with a view of sector rotation using the newly added monthly time frame on Relative Rotation Graphs; we can see all three defensive sectors are crossing over into the leading quadrant. After that, we walk through all 11 sectors, as well as the S&P 500, and wrap it up with an updated table showing all trends, support and resistance levels, as well as upside potential and downside risk.

This video was originally broadcast on September 6, 2022. Click anywhere on the Sector Spotlight logo above to view on our dedicated Sector Spotlight page, or click this link to watch on YouTube. You can also check out the video on the StockCharts TV on-demand website StockChartsTV.com, or on the associated app on mobile platforms like iOS and Android, or TV platforms like Roku, Apple TV, Amazon Fire TV and Chromecast.

Sector Spotlight airs weekly on Tuesdays at 10:30-11:00am ET. Past episodes can be found here.

#StaySafe, -Julius

For the last three trading days the SPY decline has stalled, and price has settled on the 390 level, at which we can see an horizontal line of support and a rising trend line converging to support price. The VIX is somewhat oversold, but nothing to write home about.

The most potent reason for the decline’s pause, in our opinion, is revealed in the conflict between our short-term and intermediate-term indicators. The first two panels below show that the Swenlin Trading Oscillators for breadth (STO-B) and volume (STO-V) have fallen from overbought levels and have reached oversold levels as of Friday, implying that short-term internals are pushing for a short rally.

The problem is that the intermediate-term IT Breadth Momentum Oscillator and IT Volume Momentum Oscillator (ITBM and ITVM) have also retreated from overbought levels, but are currently only in the neutral zone. We expect to see them fall further until they reach oversold levels, meaning that the longer (and stronger) internals are pushing for a continuation of the decline.

How will these conflicting internal pressures be resolved? Possibly we will see a short rally to relieve the short-term oversold condition, or price may continue to churn while short-term indicators move higher. In any case, we expect that the intermediate-term push for lower prices will eventually prevail.

Caveat: I am taking an extraordinary risk posting this article while the market is open — anything can happen. in the next three hours. It would much safer to wait until the market closes, then I would be right for at least 18 hours, until the market opens again. What the heck, damn the torpedoes!

–Carl Swenlin

Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

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Semiconductors have been a significant drag on Wall Street. Sister Semiconductors (SMH) needs to regain her -50week moving average to really see a major technical shift in the market. She is a good barometer of the overall direction of the stock market.

The “Modern Family” comprises seven key symbols that serve as an overall guide to the stock market and provide a critical view of the overall macroeconomic picture. Please visit our website to learn more about the Modern Family indices, the individual family members and why they are essential as an overall family unit for evaluating the stock market.

Presently, every member is trading underneath their 50-day moving average, pointing to potentially more downside and lower overall stock market prices. Transportation (IYT), Grandpa Russell (IWM) and prodigal son Regional Banking (KRE) are the closest to their 50-day moving averages, while Granny Retail (XRT), Big Bro Biotech (IBB), and Sister Semiconductors (SMH) are the weakest.

This week, we are looking at the weekly charts to gain perspective on market-moving issues, uncovering which areas of the Modern Family are leading and which are lagging from a longer-term perspective. Each family member tends to trade a little differently, but, collectively, they are pointing towards a bearish phase. Please keep reading to learn more.

The weekly charts show all members are trading lower and displaying negative technical characteristics. Grandpa Russell has continued to track closely with the large-caps in terms of performance since late December 2021.

Regional Banking (KRE) is also leading alongside Transportation (IYT) and both need to regain their 50-week moving averages, alongside Grandpa Russell shown below.

Big brother Biotechnology (IBB) is technically the weakest one of all the family members. Already priced under both the 50- and 200-WMAs.

We believe certain companies can perform well in this environment, specific to their respective products and services, pricing power and margin pricing ability, but most companies in these indices are losing value now. Putting all this together signals weakness for the market. However, never discount these weekly support levels.

By keeping the Modern Family in mind, traders can make better informed decisions that will ultimately benefit their trading. MarketGauge’s proprietary indicators like triple play indicator, comparable market phases, downward momentum, volume analysis, and positive trend strength (TSI), can identify trend changes before they happen, giving traders an edge in the market.

To learn more about how to invest in profitable sectors of the Modern Family, reach out via chat, phone, email, or book a call with our Chief Strategy Consultant, Rob Quinn, by clicking here.

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Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

In this appearance on Neil Cavuto’s Coast to Coaston Fox Business, Mish gives a quick rundown on how to assess what will happen next.

In this appearance on BNN Bloomberg, Mish covers what to watch for and some picks using tight risks.

ETF Summary

S&P 500 (SPY): 390 level pivotal. 385 support, 400 resistance.Russell 2000 (IWM): 177 support level to hold if any chance of more upside.Dow (DIA): 309.15 a gap low to hold from July 15th.Nasdaq (QQQ): 288 support and, if holds, must clear 297.KRE (Regional Banks): In a bearish phase with key support at 59.80-60.00.SMH (Semiconductors): 204.18 September low thus far. If fails, look at 200 as next level. If holds support, resistance to clear is at 210.IYT (Transportation): 225-226 support and back over 229, a relief.IBB (Biotechnology): 123 resistance, 117 support.XRT (Retail): 61.50-62.00 key support on two timeframes, so worth watching as another leading indicator.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education