Stocks & Crypto - 10 Setups to Watch
Navigating Volatility with Key Support & Resistance Levels
During the past five trading days, the SPX has experienced daily fluctuations of over 1% in four trading sessions, indicative of heightened volatility. The swift dissipation of bounces from daily highs on Monday and today underscores the corrective nature of this rally, rather than an impulsive surge.
The Federal Reserve has decided to keep interest rates steady, maintaining the key borrowing rate in the range of 4.25%-4.5%, where it has remained since December. Along with this decision, the Federal Open Market Committee (FOMC) has downgraded its economic growth forecast and has raised its inflation projection, now expecting the economy to accelerate at just a 1.7% rate this year, which marks a decline of 0.4 percentage points from the last estimate in December. Additionally, the Fed announced a further reduction in its “quantitative tightening” program, which involves gradually cutting back on the bonds held on its balance sheet.
This growth adjustment aligns with the warnings highlighted in the macro edition four weeks ago. For access click here.
Last weekend, this publication identified seven potential reversal setups, each dependent on maintaining designated support levels. We will now analyze the market's current dynamics and the performance of these securities relative to their respective support and resistance levels, with additional charts for Crypto, you will see the reason why I included them.
IWM
The first bullish setup highlighted last Saturday was for small caps, identified due to its price action and oversold readings on Bollinger Bands and oscillators. By holding above its weekly central level of $201.5, IWM achieved and exceeded the immediate bullish target anticipated last Saturday of $206.1, which has now become a support level.
The subsequent target is $208, but any signs of weakness in the broader indices could set downward pressure on small caps. Should IWM successfully breach $208, a significant resistance zone at $218 could pose a major challenge. That potential move is not expected to happen in a straight line nor in a week, it may take 4 to 5 weekly candles with significant volatility, hence the central level for each week will be crucial.
Same analysis continues for SPX, VIX, NDX, TSLA, SMH, NVDA, AAPL, PLTR, Bitcoin and Ethereum. If you trade some of those securities this publication is for you, and the latest weekly compass provides even more securities. Access here.
SPX
Last week I provided a roadmap for the SPX and NDX based on previous corrections, price action has followed the script, and the chart doesn’t suggest immediate deviations considering: