Art's Charts

SPY Exceeds Channel Trendline - USO Forms Falling Wedge

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There is not much change overall. Stocks remain in strong uptrends with no signs of selling pressure. The S&P 500 ETF (SPY) surged above the upper trendline of a rising channel. There are two trends at work on this 60-minute chart. First, the rising channel defines an uptrend since late January. This uptrend actually began on December 19th. Second, the swing within this uptrend is up and defined by the pink trendline. First support is set t 139.4 and a break below this level would reverse this seven day upswing. Broken resistance in the 137-138 area mark the next support zone.

120316spyi


120316qqqi

120316iwmi

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No change. The 20+ Year T-Bond ETF (TLT) broke support at 116 late last week and fell around 5% the last 3-4 days. Even though the ETF is already short-term oversold, this is a big breakdown on the daily chart and TLT could become even more oversold. Only a shock to the economy or job growth will stem this slide. Broken support in the 114.5-115 area turns into the first resistance zone to watch.

120316tlti

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No change. Rising interest rates and the prospects of a less accommodative Fed propelled the Dollar above resistance from the February high. In just two weeks, the US Dollar Fund (UUP) went from a failed support break to a resistance break. Talk about strong. Broken resistance and this week's low mark first support in the 22.20 area.

120315uupi

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Even though the stock market is surging, oil remains under pressure and continues to underperform the S&P 500. Overall, the US Oil Fund (USO) has been working its way lower with a falling wedge since late February. This could be just one big corrective pattern and a breakout at 41.1 would signal a continuation higher. For now, the trend is down with a series of lower lows and lower highs the last few weeks. RSI resistance is set at 60.

120316usoi

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The Gold SPDR (GLD) remains in a downtrend with a possible falling wedge taking shape. I point out this pattern because the daily chart shows GLD retracing 61.80% of its prior advance and potential support coming into play from the mid December high (broken resistance). The trend is down as long as the wedge falls. First resistance is set at 162 and key resistance at 165 for now.

120316gldi

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Key Economic Reports:                                               
Fri - Mar 16 - 08:30 - Consumer Price Index (CPI)             
Fri - Mar 16 - 09:15 - Industrial Production            
Fri - Mar 16 - 09:55 - Michigan Sentiment    
   
Charts 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.

Arthur Hill
About the author: , 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. Learn More
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