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Mish Schneider

Which indices could make a big break?

In this article, Forrest Crist-Ruiz, assistant director of trading research and education at MarketGauge.com, considers which indices might shoot higher today.

The iShares Russell 2000 ETF [IWM], Nasdaq 100 (represented by the Invesco QQQ Trust ETF [QQQ]), the Dow Jones (represented by the SPDR Dow Jones Industrial Average ETF [DIA]) and the S&P 500 (represented by the SPDR S&P 500 ETF [SPY]) all have the potential to make large moves Monday, if they clear their resistance levels together.

This month, the SPY, QQQ, and DIA were able to make substantial gains. Currently they sit close to new high territory.

Additionally, each has resistance from a prior high created on 16 April.

However, IWM never made a move back towards all-time highs and has spent most of April struggling to hold over the 50-day moving average at $222.98.

On Friday, IWM came close to clearing its monthly high at $226.69 but missed by five cents!

This makes Monday a pivotal day for the small cap sector, as clearing the $226.69 price level will mean that IWM is finally looking to get back on track towards its all-time high price at $234.53.

This would also be a great sign for the other indices that could use the boost of IWM’s resistance break to push themselves higher.

It should also be noted that because IWM spent most of its time trading sideways this month, it has the most potential for an explosive move higher when compared to the other indices.

If the situation lines up, we could have a great continuation from Friday’s bullish close.

With that said, we should be careful to set such high expectations as the market plays by its own rules.

This means that for Monday, we should look not only for a break of these key resistance points, but also for a large push in momentum through them.

Some of the best breakouts can be confirmed with large amounts of volume to back them up.

This article was originally published on MarketGauge. With over 100 years of combined market experience, MarketGauge's experts provide strategic information to help you achieve your investing goals.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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