The 200-week moving average (about 4 years), represented on the charts as a green line, is starting to look like one of the more important and pivotal chart points.

There is very little written about the 200-WMA. But only once, in 2007, did the SPY break its 200-WMA, for a period of over a year. In 2011, SPY tested it, but came right back through it. The same thing happened in 2020; SPY broke below the 200-WMA and came right back above it within a couple of weeks. 

In the aftermath of last week’s market plunge and continued rally since, it is worth noting that the 200-week historic weekly support levels held for the SPY and the DIA, both of which were in danger of violation. Last week, the SPY crossed almost exactly the 50% retracement from the COVID lows to January in 2022 highs, when it traded at 351.

This week, SPY is back above the 200-WMA and 360. The holdouts are the Russell 2000 IWM and NASDAQ 100 (QQQ). If either or both turn lower rather than clear their 200-WMA, that would be a sign this rally is over. On the other hand, if IWM and QQQs can clear the 200-WMA, then another leg higher is likely.

We’ll see how Wednesday shapes up.

At a 200-week MA and 50% retracement of the recent bull market, there are some positive divergences that could set the stage. Watch SPY to hold 360. Watch QQQ to take out and hold over 274. Watch IWM to clear 178.50. Plus, 170 is now a clear pivotal area.

Finally, watch the DIA to hold 299. Interestingly, many waved their hats when the Dow cleared 30k. Now, that area looks really important both technically and psychologically.

Subscribe to Mish’s Daily for additional market insights and stay up to date on market moves. 

You can also sign up for a free consultation with Rob Quinn, our Chief Strategy Consultant, by clicking here to learn more about Mish’s top-rated risk management trading service.

Mish’s Upcoming Seminars

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!

Trader’s Summit: Mish speaks with Helene Meisler on October 23rd at 12pm ET. Learn more here.

“I grew my money tree and so can you!” – Mish SchneiderGet 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

Has the market bottomed? Where should passive investors go to be safe? Mish digs into these questions and more on Coast to Coast with Neil Cavuto.

Mish and Scott discuss a possible soft landing but with loads of headwinds to watch for on RFD-TV’s Cow Guy Close.

Mish covers bonds, sugar futures, the US Dollar, and volatility on the Monday, October 17 edition of StockCharts TV’s Your Daily Five.

With BNN Bloomberg, Mish discusses the markets as U.S. banks reported earnings and why it’s important to watch long-term bonds and the stability investing in the sugar trade.

The 6-7 year business cycle in the “inside” sectors of the U.S. economy is facing a huge test, as Mish discusses on NASDAQ Talks.

Watch some select clips from Mish at ChartCon 2022!

Mish and Nicole talk risk, inflation, long bonds, dollar and where you can park some money on TD Ameritrade.

Read Mish’s latest article for CMC Markets, titled “Earnings, Inflation and Retail, Oh My!“.

ETF Summary

S&P 500 (SPY): Watch for SPY to hold 360 and clear 380.Russell 2000 (IWM): Watch for IWM to clear 178.50. Plus, 170 is now a clear pivotal area.Dow (DIA): Watch for DIA to hold 299. Interestingly, many waved their hats when the Dow cleared 30k. Now, that area looks important both technically and psychologically.Nasdaq (QQQ): Watch for QQQ to take out and hold over 274.KRE (Regional Banks): Bank earnings have been strong. This sits right on support at 63.00 and needs to clear 66.00.SMH (Semiconductors): Weak link and needs to get back over 184 hold 175.IYT (Transportation): Cleared 207, which would be good if holds. 215 is its 200-WMA.IBB (Biotechnology): A push though 125 should get this to 130, provided 121 holds.XRT (Retail): 62 is the weekly chart resistance, while the best sign is the hold of longer-term support at 55.00.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

Wade Dawson

MarketGauge.com

Portfolio Manager