This is a new quarter on the calendar, but just another day for the charts. The close of a great quarter is a positive mentally for investors, but the extended move higher has many technicians looking for a pullback or correction in the trend. Plan for what you believe to be true, but let the market validate it going forward. The following charts are a picture of where we are currently and what we are looking for near term.
S&P 500 Index – The uptrend remains in play and the support is 1388 and 1373 if the pullback remains in play. The accelerated trendline would offer support in the same area short term. We are starting a new quarter with earnings and plenty of economic data. Watch, be patient and implement your plan. Stops are based on your time frame.
SPDR Bank Index ETF – Financials have been one of the primary leaders for the broad markets. The chart shows the accelerated move through resistance. The next consolidation is in play and we are looking for a continuation move to the upside. A reversal would find support at the previous resistance. Watch and look for opportunity on the break higher.
HOLDRs Semiconductor ETF – Slowly working its way higher. The break above resistance at $35.40 was a positive, but the index has found it tough to extend the move. Short term move to $37 is the objective, but it isn’t likely to move straight there. Watch for volatility and let it play out.
iShares MSCI EAFE Index ETF – Welcome back concern in Europe or should we say thank you Spain. The challenges in Europe are still on the table along with renewed concerns in Asia with China and others. Still not convinced of the move higher. Looking for a clear move above $56 on volume if the upside is to accelerate.
iShares Russell 2000 Index ETF – The small cap index is stalled at resistance. It made a brief move higher last week, but managed to give that back. Still looking for the break higher and some renewed leadership from the sector short term. $87 target short term for the move.
iShares 20+ Year Treasury Bond ETF – The downtrend is in play, but the bond isn’t going away quickly. The Fed wants rates to remain low and any fear relative to the equity markets aides in keeping the bond in play. Watch the yield on the long end of the curve as it creeps higher. Broke above 3.2% on the 30 year and could be heading towards the 3.65% mark short term. If you still own the bond, watch your downside risk short term.
The outlook remains positive… however, this is a week of data from the economy and warning time for earnings. Watch, set your stops and see how it plays out.