The stock market followed last week’s growth/value ratio analysis as value led by a wide margin. Growth investors are getting more nervous so the Viper Report’s Tom Aspray shares the key levels of support he is watching.
The markets last week gave an emphatic answer to last week’s question on growth versus value. The S&P Growth Index (IGX) was down 4.5% while the S&P Value Index (IVX) rose 1%. The market declines last week surprised some as the S&P 500 made a new closing high on Monday. The S&P 500 was down 1.9% for the week but that was not as bad as the 4.5% drop in the tech-heavy Nasdaq 100 Index or the 2.9% decline in the iShares Russell 2000. All the markets, even the SPDR Gold Trust, were lower for the week but the Dow Jones Industrial Average held up better as it was down just 0.3%. The market internals were negative for the week with 2084 issues declining with 1489 advancing issues. The Invesco QQQ Trust (QQQ) QQQ ended 2021 by forming a doji. Last week’s close below the doji low triggered a weekly doji sell signal. The close was below the 20 week EMA at $381.84 with support from the 2021 lows, line b, now at $373.28. This is 1.7% below Friday’s close with the weekly starc- band at $357.63. The October low was $350.32, line a, which is 7.7% below the close. There is resistance now at $393.30 and the monthly pivot. The Nasdaq 100 Advance/Decline line was lower last week but closed a few points above its WMA. There is A/D line support going back to 2020 at line d with further at line c. The weekly on-balance-volume (OBV) is negative as it has turned down from its WMA with the next strong support at line e. The daily A/D line (not shown) is below its WMA and is negative. The daily starc- bands were exceeded over the last three days of last week so QQQ is in a high-risk sell area which makes a rebound likely. Of course, the bond market got as much attention last week as the stock market. The yield on the 10 Year T-Note exceeded my key resistance level at 1.
