Dot Point Weekly
A brief note on my thoughts going into this week
Hello friends, this is the first ‘dot point weekly’! What is dot point weekly you ask... well when I first look at a chart, I always start by jotting down five main data points:
Near Resistance
Near Support
Price smoothing
Momentum
Relative Strength
Why do I do this? Well, what I am looking to do is to give myself a solid base before I dig a little deeper. Let me explain these 5 data points that I look at:
Support and Resistance is pretty straight forward so ill move on to the others.
For price smoothing I look at the 200-day simple moving average, A moving average simply smooths the changes in price, I use this to identify which direction the current trend is headed… up, down or flat.
For momentum, I use the Relative Strength Index (RSI). I want to identify what range the stock is in currently (Bullish/Bearish) secondly, the RSI can help me identify any divergence which could warn me of a change in trend.
Lastly, I look at a relative strength comparison which measures the relative performance of the selected security relative to a benchmark index. This helps me identify the selected security if it is outperforming or underperforming the chosen benchmark index (I tend to use the S&P 500 as a benchmark).
Ok, enough waffling from me… let’s get started on the charts!!
S&P 500
Its been 85 days since all-time high. After a 35% drop, the all-time high is back in play… if support holds.
Near term support is in the region of 3,020;
Near term resistance is in the region of 3,230;
Price smoothing: Flat;
Momentum: RSI in a slightly bullish range. However, I would like it to hold above 50.
Dow Jones Industrial Average
Last week the Dow was all about testing the 200-day moving average.
Near term support is in the region of 24,700;
Near term resistance is in the region of 27,100 & 78.6% Fib level;
Price smoothing: Flat to downwards sloping;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Clearly underperforming relative to the S&P 500.
QQQ
QQQ’s march continues to reclaim a new all-time high. 17.11% from its 200-day moving average.
Near term support is in the region of 237.50;
Near term resistance is at the all-time high from last week;
Price smoothing: Sloping upwards;
Momentum: RSI in a bullish range;
Relative Strength: Clearly outperforming relative to the S&P 500.
Russell 2000
IWM is still down 14.90% YTD and 23% from all-time highs which was 21 months ago.
Near term support is in the region of 133 & 50% Fib level;
Near term resistance is in the region of 145.50;
Price smoothing: Sloping downwards;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Clearly underperforming relative to the S&P 500.
Materials sector
XLB closed the week just above its 200-day moving average. 14.22% from its all-time high. Short term level to watch is the 78.6% fib level
Near term support is in the region of 53 & 61.8% Fib level;
Near term resistance is in the region of 61.50;
Price smoothing: Flat to downwards sloping;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Clearly underperforming relative to the S&P 500, Would like to see a move above highlighted area.
Communication Services sector
XLC closed above its 200-day moving average 24 days ago and has continued it’s upwards trend moving 8.30% above 200-day moving average. XLC's all-time high in reach.
Near term support is in the region of 51.50;
Near term resistance is at the all-time high from early February;
Price smoothing: Slightly sloping upwards;
Momentum: RSI in a bullish range;
Relative Strength: Flat performance relative to the S&P 500, Would like to hold above the highlighted area.
Energy sector
XLE is the definition of a downtrend, the only sector to be below its 2018 and 2019 lows. 156.56% from its all-time high, which was 72 months ago.
Near term support is in the region of 35;
Near term resistance is in the region of 53;
Price smoothing: Clearly downwards sloping;
Momentum: RSI in a bearish range;
Relative Strength: Clearly underperforming relative to the S&P 500.
Financial sector
XLF has been fading since testing 200-day moving average. -22.09% YTD
Near term support is in the region of 22.50 (2018 low) & 38.2% Fib level;
Near term resistance is in the region of 26.25 & 61.8% Fib level;
Price smoothing: Downwards sloping;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Clearly underperforming relative to the S&P 500.
Industrial sector
XLI shows weakness in the short-term fading from after testing 200-day moving average.
Near term support is in the region of 66.50 & 50% Fib level;
Near term resistance is in the region of 72.50;
Price smoothing: Downwards sloping;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Clearly underperforming relative to the S&P 500. Has it found a base tho?
Technology sector
XLK’s march continues to reclaim a new all-time high. 15.08% from its 200-day moving average.
Near term support is in the region of 95.30 & 78.6% Fib level;
Near term resistance is at the all-time high from last week;
Price smoothing: Upwards sloping;
Momentum: RSI in a bullish range;
Relative Strength: Clearly outperforming relative to the S&P 500.
Consumer Staples sector
The third failed attempt to move above its 200-day moving average.
Near term support is in the region of 57.20;
Near term resistance is in the region of 61.20 & 78.6% Fib level;
Price smoothing: Flat;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Flat performance relative to the S&P 500, Would like to see a move above the highlighted area.
Real Estate sector
Right in the middle of my support zone. Next weeks price action will be meaningful.
Near term support is in the region of the 35.50 & 31.8% Fib level;
Near term resistance is in the region of the 40;
Price smoothing: Downwards sloping;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Underperforming relative to the S&P 500, Would like to see a move above the highlighted area.
Utilities sector
XLU was dominated by bears dragging the market lower throughout the week.
Near term support is in the region of 57.50 & 50% Fib level;
Near term resistance is in the region of 61 & 61.8% Fib level;
Price smoothing: Flat;
Momentum: RSI in a bearish range;
Relative Strength: Flat performance relative to the S&P 500, Would like to see a move above the highlighted area.
Health Care sector
XLV has been stuck in a range for the past 35 days. 4.28% above its 200-day moving average and 4.30% below its all-time high.
Near term support is in the region of 3,228;
Near term resistance is at the all-time high from January 2020;
Price smoothing: Upwards sloping;
Momentum: RSI in a slightly bullish range. However, would like it to hold above 50;
Relative Strength: Was outperforming now underperforming, Would like to see a move above the highlighted area.
Consumer Discretionary sector
XLY has been showing strength since March lows. 6.91% above its 200-day moving average and 1.56% YTD.
Near term support is in the region of 123 & 78.6% Fib level;
Near term resistance is at the all-time high from last week;
Price smoothing: Flat;
Momentum: RSI in a bullish range;
Relative Strength: Recently, a strong move to outperforming relative to the S&P 500. I would like to see a strong move above the highlighted area.
Bottom line: I have a question for YOU!!... Did you like this blog post? If so, please let me know in the comment section if you want me to post ‘dot point weekly’ each week?
Stay safe and good luck out there…
GH
P.S. All charts in this post are at EOD 19/06/2020
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Regarding weekly dot point.
Hi Grant. QQQ looks like you’ll have divergence very soon. Potential downside coming. Just an observation.
Also, a 6th dot point would be handy. A wrap up point that summarizes your thoughts on price action movement given your 5 previous dot points. Eg. Becauof the above, I’m expecting more upside movement to resistance then looking for a breakout signal. Or something similar.
Either way, like what you’re doing.
Cheers
Matt