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Technical Report for the Week of 09/18/23


Equities –SPX – The primary uptrend (4,243) from the mid-October 2022 low (3,491.58 - 10/13/22) remains intact. However, a violation of the Mar 2023 uptrend channel (4,593), five negative outside days (7/27, 8/4, 8/10, 8/24, and 9/1), two gap-downs (8/2 and 9/6/23), and 3-plus month head/shoulders top warn of further consolidation. Initial support is 4,430.5 (9/7/23 low) and below 4,328-4,337 (6/26 and 8/18 lows or neckline). Initial resistance is 4,482.5-4,512 (50-day ma and 9/14 high) and 4,527-4,540 (shoulders).


Fixed Income – 10-year minus 3-month yields – Spread nears resistance at -1.34 to -1.23 (200-day ma and Aug 2023 highs). Initial support is -1.55 to -1.44 (50-day ma) and -1.78 to -1.74. Fed Funds and 2-year yields achieved Feb 2007 highs and near the Jun 2006 highs, suggesting the Fed has one more rate hike left. TNX – Nears key resistance at 4.333-4.362% (Oct 2022 and Aug 2023 highs). A breakout suggests 4.54-4.66% (near-term) and 5.32-5.46% (intermediate-term). Initial support is 3.96-4.10% and then 3.74-3.75%.


Commodities – CRB – A breakout above the top of the 2022 downtrend channel (267) confirms an intermediate-term reversal. Initial support is 280-282 (50-day ma, Jul/Aug 2023 highs). WTI Crude – Above 83.5-85 (Dec 2022 and Apr/Aug 2023 highs) confirms breakout and rally to 93.5-94 and 97-99/101.88. Initial support is 83.5-85 (Aug 2023 breakout) and 81 (50-day ma). Gold – Nears key resistance at 1,953-1,980 (50-day ma and 9/1 high) and 2,001-2,011/2015. Initial support is 1,901-1,930 (Jun/Aug 2023 lows and 200-day ma).


Currencies – USD – 9/14/23 positive outside day hints at a retest of key resistance near 104.5-106 (2023 highs and right shoulders). Initial support is 104.21 (9/14/23 low) and 102.5-103 (50-day/200-day ma). EURUSD – Violation of pivotal support at 1.08-1.09 (bottom of 2023 uptrend channel and 50-day/200-day ma) warns of weakness. The next support is 1.0630-1.0635. USDJPY – Key resistance is 151.95 (Oct 2022 high). Initial support is 144-145 (Aug 2023 breakout and 50-day ma) and 142-143 (Mar uptrend/Oct 2022 downtrend).


S&P 500 Sectors – RRG study shows improvements from the prior week. Energy (XLE) moves into the Leading Quadrant. Technology (XLK) and Consumer Discretionary (XLY) weakened and Communication Services (XLC) improved within the Weakening Quadrant. Consumer Staples (XLP) also improved in the Lagging Quadrant. Utilities (XLU) joins Real Estate (XLRE), Healthcare (XLV), Industrial (XLI), Materials (XLB), and Financial (XLF) in the Improving Quadrant. XLI and XLB weaken, evidenced by falling relative momentum.


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