The Russell 2000 ETF (IWM) and Nasdaq 100 ETF (QQQ) exceeded their mid June highs over the last few days, but the S&P 500 ETF (SPY) remains a clear laggard as it failed to exceed its corresponding high. On the 60-minute chart, SPY remains with the gap down and flag break from last Thursday. The ETF tried to move back above broken support (new resistance) on Friday and Monday, but fell short. Short-term resistance remains at 128.5 and a break above this level is needed to counter the bearish flag break.
IWM remains between a rock and a hard place. Broken supports and the 50% retracement mark rock resistance in the 81 area. The mid June trendline and reaction lows of the last few days mark hard place support. Given last week's breakout, I would give the short-term edge to the bulls. Be careful though. A move below the support zone and CCI break below -50 would turn the tables in favor of the bears.
Led by Amazon and Microsoft, QQQ stole the show yesterday. The ETF edged above short-term resistance in afternoon trading, but did not close above this resistance level. While the trend since mid June is up, there is concern because the pattern could evolve into a rising wedge. The bulls have the edge as long as the wedge rises. A break below key support at 54 and a CCI break below -50 would be bearish. Also note that many stocks have small rising wedges or bear flags over the last 1-2 weeks. The bulls deserve some short-term respect as long as they rise. Support breaks would signal a continuation of the early June decline.
Key Economic Reports:
Tue - Jun 28 - 09:00 - Case-Shiller 20-city Index
Tue - Jun 28 - 10:00 - Consumer Confidence
Wed - Jun 29 - 07:00 - MBA Mortgage Index
Wed - Jun 29 - 10:00 - Pending Home Sales
Wed - Jun 29 - 10:30 - Oil Inventories
Thu - Jun 30 - 08:30 - Jobless Claims
Thu - Jun 30 - 09:45 - Chicago PMI
Fri - Jul 01 - 09:55 - Michigan Sentiment
Fri - Jul 01 - 10:00 - ISM Index
Fri - Jul 01 - 10:00 - Construction Spending
Fri - Jul 01 - 15:00 - Auto/Truck Sales
Chart of Interest: Tuesday and Thursday in separate post.
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes to trading our own accounts. First, it is the only way to really learn. Second, we are the only ones responsible for our decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. Among other things, this includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.
Led by Amazon and Microsoft, QQQ stole the show yesterday. The ETF edged above short-term resistance in afternoon trading, but did not close above this resistance level. While the trend since mid June is up, there is concern because the pattern could evolve into a rising wedge. The bulls have the edge as long as the wedge rises. A break below key support at 54 and a CCI break below -50 would be bearish. Also note that many stocks have small rising wedges or bear flags over the last 1-2 weeks. The bulls deserve some short-term respect as long as they rise. Support breaks would signal a continuation of the early June decline.
Key Economic Reports:
Tue - Jun 28 - 09:00 - Case-Shiller 20-city Index
Tue - Jun 28 - 10:00 - Consumer Confidence
Wed - Jun 29 - 07:00 - MBA Mortgage Index
Wed - Jun 29 - 10:00 - Pending Home Sales
Wed - Jun 29 - 10:30 - Oil Inventories
Thu - Jun 30 - 08:30 - Jobless Claims
Thu - Jun 30 - 09:45 - Chicago PMI
Fri - Jul 01 - 09:55 - Michigan Sentiment
Fri - Jul 01 - 10:00 - ISM Index
Fri - Jul 01 - 10:00 - Construction Spending
Fri - Jul 01 - 15:00 - Auto/Truck Sales
Chart of Interest: Tuesday and Thursday in separate post.
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes to trading our own accounts. First, it is the only way to really learn. Second, we are the only ones responsible for our decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. Among other things, this includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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