S / R Levels - Dec 30 - Jan 3
The importance of using support and resistance levels was highlighted during the week by Tesla's break below the central one on Friday, and IWM's example of a false breakout on Thursday.
The market in general gave up most of its gains, with technology stocks particularly affected by rising U.S. Treasury yields.
Tech, and Small Caps downturn coincided with a surge in the 10-year Treasury yield, which climbed to 4.64%, a level not seen since early May. This increase in yields is attributed to market expectations of a more aggressive monetary policy from the Federal Reserve in 2025 due to ongoing inflation concerns.
The rise in long-term yields is primarily driven by improved economic growth forecasts but might also reflect worries about inflation and the national deficit.
Higher yields lead to more expensive borrowing for companies, potentially limiting investments in research, development, and expansion, which can negatively impact profitability.
The importance of using support and resistance levels was highlighted during the week by Tesla's break below the central one dropping 5% on Friday, and IWM's example of a false breakout on Thursday with a doji candle in the 4 hours timeframe.
If you trade one of the following securities, this publication is for you:
Indexes: SPX, NDX, DJI
Futures: ES=F, NQ=F
ETFs (for Indexes, Bonds, and Commodities): SPY, QQQ, IWM, DIA, SMH, TLT, GLD, SLV
Leveraged and inverse ETFs: TQQQ, SQQQ, UPRO, SPXS, UDOW, SDOW, URTY, SRTY
Stocks: NVDA, META, MSFT, AMZN, GOOG, AAPL, TSLA, NFLX, COST, MSTR, PLTR, AMD
Crypto: Bitcoin, Ethereum
The low open on Friday for SPX and NDX highlights the relevance of tracking the levels for the Futures; even if you trade stocks, you should monitor them and the indexes.
Last Wednesday educational content about S/R levels was published, you can get access here:
WEEKLY LEVELS: