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Zacks Investment Ideas feature highlights: DIA, IWM, SPY and QQQ
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For Immediate Release
Chicago, IL – July 31, 2023 – Today, Zacks Investment Ideas feature highlights Dow Jones Industrial Average ETF (DIA - Free Report) , Russell 2000 ETF (IWM - Free Report) , S&P 500 Index ETF (SPY - Free Report) and Nasdaq 100 ETF (QQQ - Free Report) .
Consulting the Charts: Ugly Reversals Amid Rising Rates
The Trend Is Your Friend
Consult a chart of any of the major indices and it's not difficult to identify the primary trend. Currently, every US market is above the 200-day moving average, is up double-digits year-to-date, and is trending from the bottom left of the chart to the top right.
Savvy investors know the value of following the trend because they understand that roughly 75% of a stock's move is attributed to the overarching direction of the general market. In other words, in 2022, if you were buying stocks into a downtrend, you likely lost money. Conversely, in 2023 investors who understood and acted on the trend change profited handsomely.
Timing Matters
Though price-focused investors understand that the market is in an uptrend, they need to remember that timing is absolutely critical, regardless of the underlying trend. In other words, it's vital for investors to stay disciplined and avoid getting sloppy and "throwing spaghetti against the wall and hoping it sticks.
On Wall Street, seasoned investors understand the value of "looking left" on a price and volume chart to identify crucial levels that can significantly impact a market's trajectory. You'll find that price has "memory." By analyzing historical price action, market participants gain insights into key support and resistance levels that have played significant roles in the past and are likely to again in the future.
Current Market Analysis
The worst thing an investor who missed a bull market move can do is suffer from FOMO (fear of missing out) and recklessly chase stocks. Instead, investors should pay attention to left-side markers to enhance their decision-making process and position themselves strategically to time the market to the best of their ability.
Dow Jones Industrial Average ETF
Though the old economy value stock index has underperformed in 2023 it has come on strong recently. In 12 of the past 14 sessions, the index has produced gains. While the recent price action is impressive, its best not to chase moves. If you scan your eye to the left side of the DIA chart, you'll find that the index has hit resistance in the mid $340 zone 6 times in 2023. In other words, if DIA pulls back after its recent breakout, the high $340s is an area where the index should find buyers.
Russell 2000 ETF
Thus far in 2023, small caps have lagged behind large caps. Unfortunately for IWM holders, the ETF has significant exposure to the ailing regional banking sector. That said, the Regional Banking Index (KRE) looks to have put in a bottom, and the IWM is up more than 10% over the past two months as a result. The critical level to watch on IWM February's $199 breakdown zone. Thursday's action underscored the importance of the level. IWM was green early in the session but put in an ugly reversal late in the day. Until buyers can retake the level, ample supply exists above.
S&P 500 Index ETF andNasdaq 100 ETF
Like the other major indices, the Nasdaq and S&P 500 sold off in response to the 11th rate hike in 14 months. A nasty reversal like the one we saw Thursday indicates a market environment that requires patience. Should they retreat further, look for QQQ & SPY to find support at their previous breakout zones and their rising 50-day moving averages
Conclusion
After the massive bull run equities have experienced thus far in 2023, the rising interest rate environment is not supportive of stocks in the short-term. Look left on your chart and mark up important support levels so you can be prepared to take advantage of a potential "buy the dip" opportunity. Remember, timing is everything.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: DIA, IWM, SPY and QQQ
For Immediate Release
Chicago, IL – July 31, 2023 – Today, Zacks Investment Ideas feature highlights Dow Jones Industrial Average ETF (DIA - Free Report) , Russell 2000 ETF (IWM - Free Report) , S&P 500 Index ETF (SPY - Free Report) and Nasdaq 100 ETF (QQQ - Free Report) .
Consulting the Charts: Ugly Reversals Amid Rising Rates
The Trend Is Your Friend
Consult a chart of any of the major indices and it's not difficult to identify the primary trend. Currently, every US market is above the 200-day moving average, is up double-digits year-to-date, and is trending from the bottom left of the chart to the top right.
Savvy investors know the value of following the trend because they understand that roughly 75% of a stock's move is attributed to the overarching direction of the general market. In other words, in 2022, if you were buying stocks into a downtrend, you likely lost money. Conversely, in 2023 investors who understood and acted on the trend change profited handsomely.
Timing Matters
Though price-focused investors understand that the market is in an uptrend, they need to remember that timing is absolutely critical, regardless of the underlying trend. In other words, it's vital for investors to stay disciplined and avoid getting sloppy and "throwing spaghetti against the wall and hoping it sticks.
On Wall Street, seasoned investors understand the value of "looking left" on a price and volume chart to identify crucial levels that can significantly impact a market's trajectory. You'll find that price has "memory." By analyzing historical price action, market participants gain insights into key support and resistance levels that have played significant roles in the past and are likely to again in the future.
Current Market Analysis
The worst thing an investor who missed a bull market move can do is suffer from FOMO (fear of missing out) and recklessly chase stocks. Instead, investors should pay attention to left-side markers to enhance their decision-making process and position themselves strategically to time the market to the best of their ability.
Dow Jones Industrial Average ETF
Though the old economy value stock index has underperformed in 2023 it has come on strong recently. In 12 of the past 14 sessions, the index has produced gains. While the recent price action is impressive, its best not to chase moves. If you scan your eye to the left side of the DIA chart, you'll find that the index has hit resistance in the mid $340 zone 6 times in 2023. In other words, if DIA pulls back after its recent breakout, the high $340s is an area where the index should find buyers.
Russell 2000 ETF
Thus far in 2023, small caps have lagged behind large caps. Unfortunately for IWM holders, the ETF has significant exposure to the ailing regional banking sector. That said, the Regional Banking Index (KRE) looks to have put in a bottom, and the IWM is up more than 10% over the past two months as a result. The critical level to watch on IWM February's $199 breakdown zone. Thursday's action underscored the importance of the level. IWM was green early in the session but put in an ugly reversal late in the day. Until buyers can retake the level, ample supply exists above.
S&P 500 Index ETF andNasdaq 100 ETF
Like the other major indices, the Nasdaq and S&P 500 sold off in response to the 11th rate hike in 14 months. A nasty reversal like the one we saw Thursday indicates a market environment that requires patience. Should they retreat further, look for QQQ & SPY to find support at their previous breakout zones and their rising 50-day moving averages
Conclusion
After the massive bull run equities have experienced thus far in 2023, the rising interest rate environment is not supportive of stocks in the short-term. Look left on your chart and mark up important support levels so you can be prepared to take advantage of a potential "buy the dip" opportunity. Remember, timing is everything.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.